Germany July final services PMI 49.7 vs 49.2 prelim

• Composite PMI 48.1 vs 48.0 prelim

A slight revision higher sees the German services sector post a marginal contraction in July, ending six months of growth in activity. Demand conditions are weakening as high inflation and economic uncertainty are weighing on sentiment. The prospect of a gas crunch will also not alleviate concerns on the outlook in the months ahead. S&P Global notes that:

"Germany's service sector enjoyed a strong recovery over the first half of the year as pandemic-related constraints on activity faded, but that momentum has now been entirely lost due to strong headwinds from soaring energy and food prices and a sharp drop in confidence across the economy.

“After economic growth in Germany stalled in the second quarter, the PMI data are already pointing to a weak print in Q3, with both services and manufacturing activity in contraction in July and the survey's forward-looking indicators flashing warning signs for the months ahead.

"Service providers' expectations for future activity turned negative for the first time in over two years in July, reflecting signs of already-weakened demand as well as growing concerns about a potential gas shortage in the country.

"Although rising energy and wage bills continued to drive up businesses' costs, leading to higher prices charged for services, the effects of waning demand were seen in a third straight monthly fall in the rate of output price inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term."