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- The upturn in Germany’s service sector slowed
The upturn in Germany’s service sector slowed
According to Markit, the upturn in Germany's service sector slowed at the end of the second quarter, with business activity and new order intakes both increasing at weaker rates. Nonetheless, companies raised their employment levels, while backlogs of work accumulated for the first time in three months. Moreover, charges rose only marginally and firms remained confident about their 12-month outlook for output.
June data signalled a slowing in the pace of output growth at German service providers, with the final seasonally adjusted Markit Germany Services Business Activity Index falling from May's 55.2 to a 13-month low of 53.7.
Transport & Storage firms noted a slight decrease in output, while particularly strong growth was reported by companies in the Financial Services sub-sector. Anecdotal evidence attributed the overall rise in activity to increased new business and the processing of backlogs. Meanwhile, total private sector output expanded in June at a pace that was little-changed from May. This was highlighted by the final Markit Germany Composite Output Index - which measures the combined output of the manufacturing and service sectors - posting 54.4, down a tick from 54.5 in the previous month.
Latest survey results pointed to a slowdown in new business growth placed with German service providers, with the June rise the weakest in just under a year. As was the case with output, companies in the Transport & Storage sub-sector reported a decline.
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