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BERLIN (Reuters) - Activity in Germany's manufacturing and services sectors expanded in August, a survey showed on Monday, pointing to recovering employment levels, strong demand and a rosier business outlook even though the pace of growth fell slightly.
IHS Markit's flash Purchasing Managers' Index (PMI) showed activity in the manufacturing sector to fell a seven-month low of 62.7 from 65.9 in July. Activity in the services sector slowed to a two-month low of 61.5, down from 61.8 in July.
As a result, the flash composite PMI, which tracks the manufacturing and services sectors that together account for more than two-thirds of the German economy, fell to 60.6 from 62.4 in July.
All three indices remained firmly in growth territory, confirming that Europe's biggest economy remains firmly on a recovery path from the coronavirus pandemic.
"Although growth has slowed down since July, the data are still pointing to a stronger economic expansion in the third quarter than the provisional 1.5% increase in GDP seen in the three months to June," said Phil Smith, Associate Director at IHS Markit.
"This is despite signs of a further slowdown in manufacturing, where production levels continue to be held back by supply bottlenecks and businesses remain under pressure from record cost increases," he added.
"Services has taken over as the main growth driver, having followed up July's record expansion with another stellar performance in August, as demand across the sector continues to rebound."
(Reporting by Joseph Nasr; Editing by Catherine Evans)