According to the report from IHS Markit, the rate of growth of the German economy slowed in September. The survey indicated ongoing supply disruption to manufacturing production, while the service sector also lost momentum following its recent strong rebound. Rates of inflation of both input prices and output charges retreated slightly further from their recent peaks, though they still remained among the quickest on record, reflecting continued pressure from energy, material and transportation costs. Concerns regarding supply chains and inflationary pressures in turn weighed on business confidence. 

September saw the headline Flash Germany PMI Composite Output Index slip to 55.3, down from 60.0 in August and its lowest since February. Nevertheless, its average over the third quarter as a whole (59.2) was an improvement on the three months to June (57.4) and the highest overall for ten and-a-half years.

Supply bottlenecks remained a major hindrance to the goods producing sector’s performance, with the survey’s Manufacturing Output Index slumping to a 15-month low of 53.8 in September. Meanwhile, business activity in the service sector showed a  notably slower rate of growth (index at a four-month low of 56.0), following a sharp rebound from June to August as virus containment measures were eased over the summer.