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German services sector loses momentum-PMI

by Uma
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2023 08 03T191939Z 1 LYNXMPEJ72101 RTROPTP 4 GERMANY ECONOMY PMI

German services sector loses momentum-PMI

BERLIN (Reuters) – Growth in Germany’s services sector slowed in July for the second consecutive month, due to a drop in demand, a survey showed on Thursday.

The HCOB final services Purchasing Managers’ Index (PMI) fell to 52.3 in July from 54.1 in June, but it remained above the 50 level that signals growth in activity.

Activity in the service sector is still benefiting from the good dynamics of the first half of the year, said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

“However, growth is clearly petering out on the back of recessionary trends in the manufacturing sector,” he said.

Placing the brakes on growth was a decrease in demand for services, the latest survey data showed. Optimism is dwindling fast, with services companies no longer expecting activity to be higher in twelve months from now.

The composite PMI index, which comprises services and manufacturing, moved into contraction territory, falling to 48.5 in July from 50.6 in June.

“The risk of the whole economy falling into a recession in the second half of the year has clearly increased,” de la Rubia said.

 

(Reporting by Maria Martinez; Editing by Toby Chopra)