# Decline in German services sector eases, raising hopes for milder recession -PMI
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-01-04
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: German services sector downturn slows in December, boosting
Meta Description: Latest survey reveals that the downturn in the German services sector is slowing, offering hope for a less severe recession in the near future.
URL: https://financedigest.com/decline-in-german-services-sector-eases-raising-hopes-for-milder-recession-pmihtml

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BERLIN (Reuters) – High inflation and economic uncertainty extended a downturn in the German services sector in December, though a slower pace of decline in activity adds to hopes of a milder-than-expected recession, a survey showed on Wednesday.

S&P Global’s final services Purchasing Managers’ Index (PMI) rose to 49.2 from 46.1 in November. That marks the highest reading since July, when the current downturn began, and was slightly above a flash estimate of 49.0.

Slower input cost and output charge [inflation were a further sign that underlying price](https://www.financedigest.com/euro-zone-inflation-eases-in-feb-but-core-prices-pick-up.html "Euro zone inflation eases in Feb but core prices pick up") pressures have passed their peak, said Phil Smith, economic associate director at S&P Global, though they were still among the highest levels on record.

Encouragingly, however, the downturn has lost momentum, which together with a slower decline in manufacturing production at the end of the year adds to the hopes that any [recession will be milder than initially feared,”](https://www.financedigest.com/banking-turmoil-means-recession-fears-are-creeping-back.html "Banking turmoil means recession fears are creeping back") said Smith.

The German composite PMI index, which comprises both the [services and manufacturing sectors](https://www.financedigest.com/revolutionising-customer-service-three-sectors-that-are-leading-the-way.html "Revolutionising Customer Service: Three sectors that are leading the way…"), rose to 49.0 in December from 46.3 in November, slightly above a flash reading of 48.9.

December marked the [sixth month](https://www.financedigest.com/world-food-price-index-falls-for-sixth-month-in-sept-fao.html "World food price index falls for sixth month in Sept -FAO") in a row that the reading was below the 50 mark that separates growth from contraction.

(Reporting by Miranda Murray; Editing by Susan Fenton)


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