Germany’s private sector faces continued contraction in Oct.

Germany’s private sector continued its deterioration at the start of the fourth quarter, according to the latest HCOB flash PMI survey from S&P Global.

While output fell at a slightly slower rate in October, employment declined at its steepest pace in nearly four and a-half years.

The headline HCOB Flash Germany Composite PMI Output Index rose to 48.4 from September’s seven-month low of 47.5, remaining below the 50.0 threshold that signals growth.

New business inflows fell sharply for the fifth consecutive month, primarily driven by the manufacturing sector, where customers curtailed spending amid economic uncertainty. Despite a rebound in business expectations, overall optimism remained subdued, particularly within manufacturing.

Price levels remained stable, with services inflation slowing and manufacturing output prices experiencing the deepest cuts since September 2009. Input costs rose modestly, driven by wage increases in the services sector, while manufacturers saw a notable decline in purchase prices.