Economist: Strong expansion in Germany's service sector supports recovery expectations

Golden Ten Data reported on March 4 that Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented on Germany's PMI data: "Growth in the services sector was quite strong in February. With the pace of new business accelerating compared to last month, supported by large orders and a significant increase in overseas new business, the outlook for continued expansion in the services sector is promising. The backlog of orders, which had declined for three consecutive months, also rebounded in February. However, companies are trying to cope with improving business conditions with fewer employees. Perhaps businesses need more certainty before restarting recruitment. Costs in the services sector continue to rise rapidly. In addition to wage increases, companies cite rising energy and transportation costs as reasons. However, they can only pass on a small portion of these increased costs to customers. Nevertheless, considering the increase in business activity, we do not infer any trend from this profit pressure, especially since optimism about future business activity remains at a high level, with only a slight decline."