July 3, 2020 / 8:22 AM / a month ago

Weak demand slows recovery in German services sector in June: PMI

FILE PHOTO: A general view shows the restaurant of hotel castle Elmau in Kruen near the southern Bavarian resort of Garmisch-Partenkirchen March 25, 2014. REUTERS/Michaela Rehle/File Photo

BERLIN (Reuters) - Weak demand is holding up a more pronounced recovery in Germany’s services sector, which is slowly coming back to life after the country lifted restrictions it imposed to slow the spread of the coronavirus, a survey showed on Friday.

IHS Markit’s final PMI services index rose to 47.3 in June from 32.6 in May, higher than a flash reading of 45.8 but below the 50 mark dividing growth from contraction.

The composite PMI index covering both the services and manufacturing sectors rose to 47.0 from 32.3 the previous month. That was higher than the flash figure of 45.8.

“The relaxation of the lockdown has breathed life back into some parts of the economy, though June’s PMI survey suggests that activity is still largely depressed thanks in part to persistent weakness in demand,” said Phil Smith, principal economist at IHS Markit.

“Export business was a particularly soft aspect of the latest data, so the reopening of borders should add extra impetus to a recovery.”

Reporting by Joseph Nasr; Editing by Hugh Lawson

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