Berlin, January 6 - Germany's service sector recorded a slight increase in business activity for December, as indicated by the HCOB final services Purchasing Managers' Index (PMI), which rose to 51.2 from 49.3 in November. This marks a return to growth territory despite ongoing price pressures, with any reading above 50 signifying expansion. The uptick was primarily driven by progress in addressing backlogs, although new business inflows continued to decline for the fourth consecutive month due to customer uncertainty and weak demand in the manufacturing sector.
Despite this modest growth, the sector is facing significant cost pressures, with input costs rising at the fastest rate since February, largely due to wage increases. The HCOB Germany Composite PMI, which includes both services and manufacturing, remained in contraction at 48.0, slightly up from November's low of 47.2. Employment in the service sector fell for the sixth month in a row, attributed to cost-saving measures and a lack of new projects.
Rome, January 6 - Italy's service sector returned to growth in December, with the HCOB Purchasing Managers' Index for services rising to 50.7 from 49.2 in November. However, new business continued to decline for the second consecutive month, with the new business subindex at 49.1, indicating ongoing contraction. Despite improved hiring activity and a better outlook for the year ahead, service providers reported significant cost pressures, particularly from wages and energy costs, resulting in a sharp increase in charges.
The composite PMI, which combines services and manufacturing, also indicated a slower pace of contraction, improving to 49.7 from 47.7 in November. Italy's economic rebound from the COVID-19 pandemic appears to be slowing, with national statistics indicating stagnation in GDP growth and a forecast of only 0.5% growth for 2024, significantly below the government's target.