German Services Sector Faces a Slowdown

The German services sector has shown signs of a slowdown in February, with the Services PMI Business Activity Index dropping to 51.1 from 52.5 in January, as reported by S&P Global and Hamburg Commercial Bank. This figure represents a three-month low, indicating a potential shift in the economic landscape.

Composite PMI Output Index Also Declines

Further compounding the situation, Germany's Composite PMI Output Index has also seen a decrease, standing at 50.4, down from 50.5 in January. This marks a two-month low and highlights the growing concerns over inflationary pressures driven by increasing labor costs amidst rising employment.

Expert Insights

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented on the situation, stating, "Services activity growth has slowed down since the start of the year, more so than the initial estimates suggested. While there is still mild growth, the counterbalance to the recession in manufacturing is less pronounced, placing the economy in a more vulnerable position."