German service sector growth slows in November, PMI shows

By Miranda Murray

BERLIN, Dec 3 (Reuters) - Germany's services sector grew for a third consecutive month in November, albeit at a slower pace than October's two-year-plus high, due to softer increases in new business and employment, according to a survey published on Wednesday.

The final HCOB Germany Services PMI fell to 53.1 in November from a 29-month high of 54.6 in October, but still slightly above a preliminary November reading of 52.7.

A reading below the 50.0 mark indicates a drop in overall activity, while anything above that mark signals business expansion.

"The service sector is likely to keep Germany's growth just above zero in the fourth quarter," said Hamburg Commercial Bank chief economist Cyrus de la Rubia.

He cited households' cautious spending behaviour and deepening recession in manufacturing as being behind the slowdown.

The survey highlighted a softer increase in new business and employment, with business expectations slipping to a five-month low. Despite this, demand remained robust, with many firms citing stronger customer demand as a key driver of activity.

"The continued growth in new business suggests that business activity in the service sector will also grow in the last month of the year," said de la Rubia.

"For the coming year, the expansionary fiscal policy, which is also likely to be accompanied by higher investment volumes, should have positive spillover effects on the service sector."

The slowdown in services was also reflected in the HCOB final composite PMI that tracks services as well as manufacturing, which eased to a slightly upwardly revised 52.4 in November from 53.9 the month before.

(Reporting by Miranda Murray; Editing by Joe Bavier)