Germany's second lockdown pushed services sector deeper into recession: PMI

© Reuters. FILE PHOTO: General view shows restaurant of hotel castle Elmau in Kruen

BERLIN (Reuters) - Germany's second lockdown to contain the COVID-19 pandemic pushed the services sector deeper into recession in November, bringing overall private sector activity in Europe's largest economy to a near halt, a survey showed on Thursday.

Restaurants, bars, hotels, gyms and entertainment venues have been closed since Nov. 2 to contain an aggressive second wave of coronavirus infections. Factories and shops remain open with social distancing conditions in place.

IHS Markit's final services Purchasing Managers' Index (PMI) fell to 46.0 from 49.5 the previous month.

The reading came in lower than a flash estimate of 46.2 and marked the second month in a row that the services index was below the 50 mark dividing growth from contraction.

The main drag came from hospitality and restaurants, but other consumer-focused services were also severely hit by the renewed lockdown measures.

However, the survey suggested a far smaller overall contraction of gross domestic product compared with that seen in spring following the first lockdown, as activity remained solid in those sectors not affected by the partial lockdown.

"The extension of lockdown measures into December means it is going to be a difficult end to the year for the German economy, of course, for some sectors more than others," Phil Smith from IHS Markit said.

Progress on COVID-19 vaccines has helped brighten the outlook for many businesses, though it remains a long road to full recovery, Smith added.

The drop in services activity was partly offset again by robust growth in manufacturing in November.

The final composite PMI, which covers both sectors of the economy, fell to 51.7 from 55.0 in October. That was weaker than the flash reading of 52.0.