BERLIN - German business activity contracted in August for a second consecutive month and by more than expected, a preliminary survey showed on Thursday.
The survey suggests Germany's economy, which unexpectedly contracted by 0.1% in the second quarter, has not picked up pace going into the second half of the year. Any reading below 50 indicates contraction. The services sector index eased in August to 51.4 from 52.5 in July, but remained in expansion territory. Analysts polled by Reuters expected the index to fall less steeply to 52.3.
"The recession in Germany’s manufacturing sector deepened in August, with no recovery in sight," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, noting weakness in the manufacturing sector was starting to spill over into the services sector.