BERLIN (Reuters] – Although Germany’s private sector growth accelerated in November, persistent supply bottlenecks in the manufacturing industry continued to slow factory output, pushing up inflationary pressures at unprecedented heights. A Tuesday survey revealed that this was despite a slight acceleration in German GDP.

IHS Markit’s composite flash Germany purchasing managers’ index rose 2 months to 52.8 from 52.0 in October. The reading was more than the 52.0 expected by Reuters polls of analysts, who predicted a fall to 51.0 for November. Activity growth of more than 50 points is a positive reading.

Lewis Cooper, an economist at IHS Markit said that data shows the decline in German economic growth over the past three months is stabilizing.

Europe’s most important economy had a stronger trend for export orders, however overall, new work rose at a weakest rate since Feb.

Manufacturing’s flash PMI fell to 57.6, down from 57.8 the month before.

In spite of recent COVID-19 infected surge, signs point to better prospects for growth in the services sector. Services PMI activity index increased by 2 months to 53.4 from 52.4 in Oct.

A combination of higher energy costs and shortages in material, as well as issues with supply chains, caused unprecedented cost inflation. This led to many firms raising their prices to an unheard of level, according to the survey.

Cooper stated that this subsequently affected business confidence, which was lowest in over a decade, as sentiment plummeted to November due to concerns about the pandemic and supply issues, Cooper explained.

On Monday, the German central bank stated that the economy might stagnate during the fourth quarter because of a shortage of goods and labor as well as new restrictions against the coronavirus pandemic.