Why Germany’s Services PMI Weakened in October

According to data provided by Markit Economics, the final Markit Germany’s services PMI (purchasing managers’ index) stood at 54.70 in October 2017 compared to 55.60 in September 2017. This reading didn’t beat the preliminary market’s estimation of 55.0.

The services PMI includes the following:

• Production output showed slower improvement in October 2017 compared to September.
• New business orders also improved at a marginally slower rate in October 2017 compared to September.
• The employment in the service sector also rose moderately in October 2017.

The iShares MSCI Germany ETF (EWG), which tracks market performance in Germany, increased nearly 1.9% in October 2017. The iShares MSCI Germany Small-Cap ETF (EWGS), which tracks the performance of Germany’s small-cap stocks, rose nearly 1.7% in October 2017.

The weaker performance in Germany’s services PMI is mostly due to the fall in domestic and international demand. Its manufacturing PMI also remained unchanged in October. The fall in export orders in the manufacturing and service sectors hampered the overall performance in that month.

In the next part of this series, we’ll analyze the performance of France’s services PMI in October 2017.