IHS Markit's final services Purchasing Managers' Index (PMI) found that activity in the sector had risen to 47.0 from 46.0 in November. The reading was lower than a flash value of 47.7, however, and remained below the 50 mark that separates growth from contraction.
The composite PMI index, which comprises both the services and manufacturing sectors, rose to 52.0 from 51.7 in the previous month, buoyed by rising demand for goods that kept German factories busy despite the lockdown. The reading was lower than a flash figure of 52.5.
"Unlike during the first lockdown, the disruption to activity in the final quarter of 2020 was confined mainly to those sectors where temporary closures were in place, while other parts of the economy, notably manufacturing, showed much greater resilience," said IHS Markit's principal economist Phil Smith.
He added: "While businesses have become more optimistic about activity in a year's time thanks to the development of COVID vaccines, the picture for the near-term still remains uncertain, with restrictions on activity set to stay in place as long as case numbers remain high."
(Reporting by Joseph Nasr; Editing by Catherine Evans)
