The headline seasonally adjusted IHS Markit Germany Services PMI Business Activity Index ticked up in January for the first time in four months, signalling a more solid rate of growth than at the end of 2018. However, at 53.0, from 51.8 in December, the latest reading was still the second-lowest in the past eight months and below the average recorded since the current upturn began in mid-2013 (54.2).

Inflows of new business at service providers eased closer to stagnation in January, rising only marginally and at the slowest rate for over three-and-a-half years. With business activity growing more quickly than incoming new work in January, service providers recorded a further decrease in backlogs during the month. It marked the first back-to-back falls since the spring of 2017.Furthermore, the rate at which outstanding business decreased was the most marked since May 2016. January saw the rate of employment growth across Germany's service sector ease for the fourth straight month to the slowest since last May.

On the price front, January's survey indicated a steep rise in service sector output charges that was the strongest in three months. Wage pressures were also widely mentioned, with services firms' overall operating expenses rising to the greatest extent since March 2011.

Looking ahead, service providers reported slightly stronger optimism towards the outlook for activity over the next 12 months.