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COVID curbs dampen activity in German services sector in Dec -PMI

Restrictions to contain the coronavirus dampened activity in Germany’s services sector in December and concerns over the Omicron variant clouded the outlook for January, a survey showed on Wednesday.

IHS Markit’s final Purchasing Managers’ Index (PMI) for services found that activity in the sector had fallen to 48.7 from 52.7 in November. The reading was slightly higher than a flash estimate of 48.4.

The composite PMI index, which covers both the services and manufacturing sectors, fell to 49.9 from 52.2 in November. The reading was lower than a flash figure of 50.0.

“The fall in activity was only modest, but with additional restrictions having come into effect since the December survey and the Omicron variant looming large, there are further downside risks to activity in January,” said Phil Smith, associate economics director at IHS Markit.

“Nevertheless, we saw services firms’ confidence towards the year-ahead outlook improve in December, reflecting expectations that activity levels will inevitably start to normalise once infections and restrictions ease, and hopes that the pandemic will pose less of a threat to the economy this time next year.”
Source: Reuters (Reporting by Joseph Nasr; Editing by Catherine Evans)

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