German services sector grows modestly in March, PMI shows
The final HCOB Purchasing Managers' Index (PMI) for the services sector fell to 50.9 in March from 51.1 in February, staying slightly above the 50.0 threshold that indicates growth.
"The service sector seems to be losing momentum, though it was not exactly racing ahead before," said Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank AG.
Firms faced challenges with new business inflows dropping at the fastest rate in six months, driven by heightened uncertainty and slow decision-making among customers.
The decline was partly attributed to reduced foreign orders, exacerbated by tough market conditions, competition and a stronger euro.
Employment continued to rise, with the pace of job creation slightly accelerating from the previous month, the survey showed.
Looking ahead, firms expressed increased optimism, buoyed by expectations of fiscal expansion in Germany and hopes for growth driven by new products, services, and technological change.
"The fact that hiring is still happening and confidence in future business activity has even ticked up suggests we are not looking at a long-term slump," de la Rubia said.
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