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German services sector drives growth as recovery persists- PMI - Financial Markets Worldwide

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ReutersEconomic Indicators22 minutes ago (Sep 03, 2021 04:11AM ET)

© Reuters. FILE PHOTO: A general view shows the restaurant of hotel castle Elmau in Kruen near the southern Bavarian resort of Garmisch-Partenkirchen March 25, 2014. REUTERS/Michaela Rehle

BERLIN (Reuters) – Activity in Germany’s services sector expanded at a strong pace in August, albeit slightly weaker than in the previous month, as businesses which had been hit by coronavirus lockdowns catered for pent-up demand, a survey showed on Friday.

IHS Markit’s final PMI services index found that activity in the sector had fallen slightly to 60.8 from 61.8 in July. The reading was also lower than a flash value of 61.5.

The composite PMI index, which comprises both the services and manufacturing sectors, fell to 60.0 from 62.4 in July, reflecting the continued recovery of the manufacturing sector. The reading was lower than a flash figure of 60.6.

“The service sector followed up July’s record performance with another sharp increase in business activity in August, and has taken the mantle from manufacturing as the main driver of growth,” said Phil Smith, Associate Economics Director at IHS Markit. “Although the rate of expansion on a monthly basis looks like it has passed its peak, the scene is already set for strong growth in the third quarter, even if we were to see a further loss of momentum in September.”

“The Delta variant is a risk to service sector demand in the near term,” he added. “But looking ahead, businesses remain optimistic that conditions will have improved come this time next year, with many still hoping for an end to the pandemic and an associated recovery in travel activity.”

This optimism was reflected in a rapid pace of job creation, the survey showed.

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