Fears for Germany’s economy as service sector drops to lowest level in THREE YEARS

Monday, September 5, 2016
By Paul Martin

GERMANY’S economy has flashed further warning signs of disaster, after its service sector plunged to its lowest level in more than three years last month.

By LANA CLEMEN
Express.co.uk
Mon, Sep 5, 2016

Angela Merkel’s government and the European Central Bank will no doubt be concerned after output tumbled to a 37-month low of 51.7 in August from 54.4 in July, as measured by Markit’s Purchasing Managers’ Index (PMI).

At the same time, service providers business expectations hit their lowest level since October, and companies also reported a slowdown in new business.

It meant the powerhouse of Europe’s saw its service and manufacturing sectors, which account for two-thirds of the economy, saw a sharp overall slowdown last month.

The disappointing reading meant Markit’s final composite PMI, covering both manufacturing and services, fell to 53.3 from 55.3 in July.

A number below 50 means the sector is contracting.

The slowdown is another sign that Germany’s overall economic growth is set to take a big hit in the third quarter in the wake of Britain’s vote to leave the European Union (EU).

Markit economist Oliver Kolodseike said: “While we should still expect GDP to expand in the third quarter, recent data suggest that the rate of growth is likely to be uninspiring.”

It come after confidence in the eurozone’s largest economy last month dived at the fastest rate since the height of the eurozone debt crisis in 2012, as measured by the economic institute Ifo survey.

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