BERLIN (Reuters) - German services firms saw their business activity improve slightly in November, but a strong fourth wave of coronavirus infections and the new Omicron variant are clouding the outlook for Europe's largest economy, a survey showed on Friday.
IHS Markit's final Purchasing Managers' Index (PMI) for services showed activity in the sector rose to 52.7 in November from 52.4 in the previous month. That was weaker than a flash estimate published last month.
The composite PMI index, which comprises both the services and manufacturing sectors, edged up to 52.2 from 52.0 in October. Still, the reading was below its long-time average in the survey series of 53.1.
"Germany's service sector was able to eke out further modest growth in November, but the survey's forward-looking indicators gave reason for concern," IHS Markit analyst Phil Smith said.
The fourth wave of coronavirus already weighed on inflows of new work and business confidence in November while the Omicron variant is now adding further uncertainty with the risk of stricter containment measures, Smith said.
The German economy is therefore set for a notable slowdown in growth, if not a stagnation in the final quarter, he added.
The survey revealed a further increase of inflationary pressures driven by a jump in energy costs as service providers joined manufacturers in recording an unprecedented rise in prices.
German consumer price inflation, harmonised to make it comparable with other euro zone countries, hit 6% in November which was the highest rate recorded since January 1997 when the EU-harmonised series began.