Posted By Wanda Rich
Posted on June 3, 2022
BERLIN (Reuters) – Germany’s services sector was a bright spot for the economy in May as manufacturing struggles, but there are signs the pace of growth is starting to slow down, a survey showed on Friday.
S&P Global’s final services Purchasing Managers’ Index (PMI)fell to 55.0 in May from 57.6 the month before. The flash estimate for May had been 56.3. Those values are all still above the 50 mark that separates growth from contraction.
Employment looked particularly strong, with the rate of job creation accelerating to its fastest since last November, and new export business returned to growth after two months.
“That said, the survey showed signs of a loss of momentum as activity rose at the slowest rate for four months, reflecting a fading of the post-lockdown rebound as well as growing headwinds from sharp price increases and hesitancy amongst clients,” said Phil Smith, Economics Associate Director at S&P Global.
Average prices in the services sector increased at the second-quickest pace since the series began in 1997, the survey found, beaten by April’s peak, as operating expenses continued to rise in May on the back of higher energy and fuel prices.
Smith said that with no quick fixes in sight, business confidence towards growth prospects generally remained low.
The composite PMI index, comprising both the services and manufacturing sectors, fell for a third consecutive month in May, to 53.7, from 54.3 in April. The reading was lower than a flash figure of 54.6.
(Reporting by Miranda Murray; Editing by Toby Chopra)
