As PMI shows, the German services sector is accelerating in April

BERLIN, May 6 (Reuters) – Economic activity in Germany’s services sector gained momentum at the start of the second quarter, helped by a rise in new orders, a survey showed on Monday.

HCOB’s Purchasing Managers’ Index (PMI) rose to 53.2 in April from 50.1 in March, surpassing the 50.0 mark that separates growth from decline. The reading was the highest since June last year.

“The German services sector, which was still in the doldrums at the beginning of the year, is recovering rapidly,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

de la Rubia noted that not only was business growing at its fastest rate in ten months, but there was also a recovery in new and pending business and employment.

At the same time, the survey signaled continued inflationary pressure, with both input costs and finished goods prices rising faster than historical averages.

“We interpret this pricing strength as another indicator of the overall health of the services sector,” de la Rubia said.

The composite PMI of services and manufacturing rose to 50.6 in April from 47.7 in March, crossing the 50.0 mark for the first time in ten months.

According to the report, gains were solely driven by the services sector, while manufacturing continues to suffer a deep decline. (Reporting by Maria Martinez; Editing by Christina Fincher)