Germany's service sector hits six-month low in July

Monday, 05. August 2019 10:00

Service sector in Germany slipped at the beginning of the third quarter of 2019, dropping down to a six-month low of 54.5, IHS Markit announced on Monday. Within the same month, business optimism with regards to future output sank to its lowest for more than four-and-a-half years. Composite Purchasing Managers' Index (PMI) in Europe's largest economy stood at 50.9 in July, down from 52.6 in June and its lowest reading in just over six years. Latest data showed a drop in total new business in July, marking the fifth time in the past seven months that a decrease has been recorded.

The rise in seasonally adjusted IHS Markit Germany Services PMI was supported by a rise in inflows of new work and stronger domestic demand, while the July's decrease in new export business was the least marked in the past four months. The volume of outstanding business across the service sector was unchanged during the previous month.

"The PMI data show that the pace of job creation in Germany is now at its slowest for over four years, which is a risk in itself to growth prospects. The good news for households and the health of consumer spending, in general, is that there is still evidence of robust wage growth and overall price pressures are subdued," Phil Smith, Principal Economist at IHS Markit said.

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