According to the report from IHS Markit, tougher measures to control the spread of coronavirus disease 2019 (COVID-19) infections further depressed activity across Germany’s service sector at the start of the year, although overall economic output in the country continued to see support from growth in the manufacturing sector and rising goods exports. Data also showed employment increasing slightly in January as firms’ expectations for the year ahead improved.

Elsewhere, January’s survey revealed unprecedented delays on the delivery of inputs to manufacturers amid growing pressure on supply chains and widespread freight disruption.

The headline Flash Germany Composite Output Index fell to 50.8 in January, down from 52.0 in December and its lowest reading for seven months.

Sector level data showed services activity dropping for the fourth month in a row, and at a slightly quicker rate than in December (index at 46.8 from 47.0). The Manufacturing Output Index remained in growth territory in January, though slipped to a five-month low of 58.6 to show a further loss of momentum in the goods-producing sector.