German service sector grows at record pace after lockdown lifted
FILE PHOTO: The skyline with its financial district is photographed as the spread of the coronavirus disease (COVID-19) continues during an extended lockdown in Frankfurt, Germany, January 14, 2021. REUTERS/Kai Pfaffenbach/File Photo
BERLIN (Reuters) — Activity in Germany’s service sector grew in July at the fastest pace on record, a survey indicated on Wednesday, as businesses enjoyed the benefit of the economy reopening after COVID-19 restrictions were lifted.
IHS Markit’s final services Purchasing Managers’ Index (PMI)measuring activity in the sector rose to 61.8 in July from 57.5 in June. The July reading was the strongest since the survey began more than 24 years ago.
The composite PMI index, which comprises both the service and manufacturing sectors, rose to 62.4 in July from 60.1 in June, surpassing a previous record set in June 2006.
«The ramping up of activity is … proving to be good news for workers, with companies taking on extra staff at an unprecedented rate,» said Andrew Harker, Economics Director at IHS Markit.
«Inflationary pressures remain elevated, however, and companies will take little solace from the fact that costs rose at a slightly weaker pace than in June. With the sector running hot and severe pressure on capacity signalled, rising costs look set to remain a feature in the near term at least,» he added.
German retail sales rose much more than expected in June following the easing of COVID-19 restrictions, data showed on Monday, supporting hopes of a consumer-driven recovery in Europe’s largest economy over the summer months.