Germany’s service sector contracted only marginally in July as demand picked up slightly and new business rose for the first time in five months, a business survey showed on Wednesday.

Service Sector Conditions

The final HCOB Germany services Purchasing Managers’ Index, compiled by S&P Global, rose to 49.8 in July from 48.6 the month before, coming in slightly above an initial reading of 49.6.

A reading below 50.0 indicates contraction, and the closer it comes to that figure, the slower the rate of contraction.

Workforce numbers slipped only slightly, with the rate of job losses easing for a third straight month and the weakest since the current run of cuts began at the start of the year.

New business edged back into growth after four months of decline – the first signs of a pick-up in demand since the outbreak of the Middle East war in late February.

Export orders still fell, but the drop was only marginal and the weakest in the current five-month sequence.

Price pressures intensified at the start of the third quarter: Input cost inflation rebounded from June’s seven-month low, while output charge inflation accelerated for the first time in three months to its highest since April.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.