German service sector growth slows to seven-month low, PMI shows

BERLIN, April 7 (Reuters) - Business ‌activity growth ​in ​Germany's service sector abruptly lost momentum in March as demand weakened amid fallout from the war ‌in the Middle East, a survey showed on ⁠Tuesday.

The final S&P Global services PMI for Germany fell to 50.9 in ‌March from 53.5 in ‌February, marking its lowest reading since September and slightly below a preliminary reading of 51.2.

A reading above 50 indicates ​growth while one below signals contraction.

Phil Smith, economics associate director at S&P Global Market Intelligence, cited higher ⁠prices at the petrol pumps and heightened uncertainty as leading to the slowdown.

Despite the ​sharply rising costs, however, service providers have not been able to pass on greater price ​increases to customers due to the ‌weaker demand environment, he added.

"Inflows of new business have fallen for the first time since ⁠last September in a clear sign of the Middle East war's immediate impact on demand, whilst a notable drop in business ⁠expectations underlines how higher energy prices, supply chain disruption and generally elevated ​levels of uncertainty are set to stifle growth in the year ahead," said Smith.

Business expectations dropped to a three-month low in March, ‌to 53.4, and slipped below the long-run average of 56.7.

The final S&P Global composite PMI, ‌which includes manufacturing and services, ticked down to 51.9 in ⁠March from 53.2 the ‌previous month, a three-month ​low driven entirely by the downturn in the service sector.

(Reporting by Miranda Murray; Editing by Hugh ‌Lawson)

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