BERLIN (Reuters) – Germany’s services sector contracted in August for the second month in a row on weaker demand, linked to runaway inflation and deteriorating confidence, final results show. S&P Global survey of purchasing managers in the services sector released on Monday.
The PMI services index fell last month to 47.7 against 49.7 in July and 48.2 in the first estimate.
Although service companies continued to recruit to improve their capacities, employment growth lost momentum and posted its weakest level in a year and a half as the sector continues to suffer from rising costs related to soaring energy prices and rising wages.
“After providing significant support to the economy in the first half of the year, activity in the German services sector began to weaken in the third quarter as domestic demand came under pressure from a skyrocketing inflation and falling confidence,” said Phil Smith, associate chief economics officer at S&P Global.
The composite PMI, which brings together services and manufacturing industry, fell in August to 46.8 after 48.1 the previous month.
(Report Paul Carrel; French version Claude Chendjou, edited by Tangi Salaün)
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