German services sector growth expands

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.”