Germany June final services PMI 54.1 vs 54.1 prelim

<ul><li>Prior 57.2</li><li>Composite PMI 50.6 vs 50.8 prelim</li><li>Prior 53.9</li></ul><p>The services sector remains the only bright spot in the German economy but even the rate of expansion there has slowed markedly. Overall, it is still able to carry a marginal growth for the month of June but it doesn't bode well for the outlook if demand conditions continue to falter down the road. HCOB notes that:</p><p>"Is this now the turning point in the services sector that has been expected for some time? After the HCOB PMI services
business activity index had risen for the first five months of the year, signalling a sustained acceleration in growth, the rate of
expansion is now slowing. In parallel, growth in new business has also softened.
</p><p>“This development comes as no surprise, as the loss of momentum in France, Italy and Spain had already begun a month
earlier. It was also inevitable that the decline in demand in the manufacturing sector, which began in the middle of last year,
would have to leave its mark on the service sector at some point.
</p><p>“However, it is not the case that the sector is now gripped by a deep sense of malaise. On average, companies continue to
expect growth in the future, even if they are somewhat less optimistic in this respect than in May. At the same time,
companies have hired slightly more staff than in the previous month, which also expresses a degree of confidence.
</p><p>“Germany will probably escape a continuation of the recession that set in during the fourth quarter of last year. This can be
deduced from the composite PMI, which on average signalled solid growth in the overall economy in the second quarter, but
in June was only just above the expansion threshold. However, the risk of the economy slipping into recession again in the
second half of the year has increased."</p>

This article was written by Justin Low at www.forexlive.com.