<<FRANKFURT, Sept 3 (Reuters) - Germany's services sector kept growing briskly in August, driven by robust domestic demand, but the pace of expansion slowed as the Asian crisis dampened sentiment, the Reuters German Service Index showed on Thursday.
A monthly survey commissioned by Reuters and compiled by British group NTC Research Ltd showed the main business activity index fell to 56.8 in August on a seasonally adjusted basis from a revised 57.3 in July, NTC said. NTC said the financial crisis in Asia had some cooling impact both on demand and business expectations.
"A modest fall in the pace of growth of demand for the third month running was generally attributed to the detrimental effect of the Asian financial crises on confidence in certain sectors," it said. It said that while 40 percent of firms expected to see record growth in the coming year against just seven percent bracing for a contraction, the business expectations index fell 0.6 point to 66.7, its lowest level since February. But with the overall index reading still well above 50, which signals no change in business activity, the survey showed the services sector growing for the 15th consecutive month, NTC said. "Robust domestic demand combined with increased sales and marketing activities were reported to have boosted incoming new business in August," it said.
Available exclusively through Reuters, the index is based on a survey of business executives at 460 service sector companies and covers about 40 percent of the German economy in terms of output. Analysts said the survey confirmed that German economic growth was more and more driven by domestic demand as exporters were beginning to feel the bite of the financial turmoil in Asia and Russia.
"This (the survey) is consistent with the overall view we've seen -- a broadening of the base of the German recovery, which is increasingly domestic demand driven," Norman Williams of Barclays Capital Markets told Reuters Television. He said that the impact of the Russian crisis, which escalated late last month, probably was not yet fully reflected in the survey's results. "That is more likely to come through in manufacturing PMI (Purchasing Managers Index) in the next few months with knock-on effects in the service index," Williams said.>> |
