Investing.com - Private sector output in Germany deteriorated in October, as business activity rose at the weakest pace in almost three-and-a-half years, according to survey data released on Wednesday.
The closely-watched report underlined worries that the euro zone's largest economy may be losing steam heading into the fourth quarter, raising concerns about the potential fallout from a global trade war.
Market research group Markit said that its Flash German Composite Output Index, which measures the combined output of both the manufacturing and service sectors fell to 52.7 this month, the lowest since May 2015, from 55.0 in September. Economists had forecast a reading of 54.8.
The flash manufacturing purchasing managers’ index slumped to 52.3, the lowest in 29 months, from a final reading of 53.7 in September. Analysts had expected the index to slip to 53.5.
The preliminary German services purchasing managers’ index declined to a five-month low of 53.6 this month, down from 55.9. That was below expectations for a reading of 55.5.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Commenting on the report, Phil Smith, Principal Economist at Markit, said, “The rise in overall business activity was the weakest in almost three-and-a-half years, reflecting not only a further easing of manufacturing production growth, but also a slowdown in the previously steadfast service sector."
The slowdown in business activity growth was partly attributable to a weaker trend in new orders, which displayed the smallest monthly rise since June 2015.