Germany: Services PMI reaches six-month high in March
The HCOB Germany Services Purchasing Managers’ Index (PMI) rose to 50.1 in March—a six month-high high—from 48.3 in February. As a result, the index moved above the 50.0 no-change threshold, and signaled an improvement in services sector operating conditions compared to the previous month.
The improvement in services activity came as firms pointed to tentative signs of a recovery in client interest as well as a clearing of backlogs. Meanwhile, there was sustained job creation among service providers, driven by strategic hiring and a slowdown in the decline of new business inflows.
Wage pressures remained a primary factor driving up operating expenses, although the rate of input price inflation slowed to its lowest since October of the previous year. Output price inflation also decreased, hitting its lowest point in almost three years, yet remained above the pre-pandemic average. Business sentiment continued to strengthen, with the degree of optimism reaching its highest since before Russia’s full-scale invasion of Ukraine, reflecting general hopes for an improvement in market conditions over the coming year.