German Private Sector Activity Rises to Highest Level in 3 Months: All Eyes on ECB

In some positive news for the German economy it was reported today that German private sector activity rose to 3 month highs in November which made analysts believe that the German economy continues to remain one of the biggest growth drivers for the Eurozone economy. According to market research firm Markit, it was reported that German Composite Output Index which measures the combined output of both the manufacturing and services sector improved from 54.2 in October to 54.9 in November. Analysts on the street had expected a reading of 54.0. It is imperative to state that a reading above 50 indicates expansion in the sector. It is important to state that the sharp uptick was on the back of an upturn in activity seen at service providers where the rate of increase was the sharpest in over 14 months.

The report comes back on reports which showed that that German producer price index fell more than expected last month. According to a report released by Destatis, the German Producer price inflation fell to a seasonally adjusted annual rate of -0.4 percent as compared to a reading of -0.4 percent in the preceding month. Analysts on the street had expected German producer price inflation to fall to 0.2 percent last month. Many believe the sharp slowdown in China which has impacted export orders and the fall in energy prices are the key reasons for the sharp decline in producer prices in Germany.

Analysts on the street believe that both the reports suggest that the German economy continues to show modest growth during the fourth quarter of the economy. Many analysts would be closely watching the European Central Bank meeting in December with expectations that the ECB could increase the size of its bond buying program in order to provide the much needed impetus to the economy.

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