BERLIN (Reuters) - Germany's services sector saw its six-month expansion come to an end in July as higher prices and growing concerns over gas supplies put the brakes on a post-lockdown rebound, a survey showed on Wednesday.
S&P Global's final services Purchasing Managers' Index (PMI) fell to a final reading of 49.7 in July from 52.4 the previous month. That was slightly above a flash estimate of 49.2.
Higher energy bills and rising wages were noted by surveyed firms as having an influence on the strong cost pressures, though the rate of overall operating expenses ticked down in July and was at its lowest level since February.
"Service providers' expectations for future activity turned negative for the first time in over two years in July, reflecting signs of already-weakened demand as well as growing concerns about a potential gas shortage in the country," said Phil Smith, Economic Associate Director at S&P Global.
A stagnation in German economic growth in the second quarter and PMI data showing services and manufacturing activity in contraction in July bode ill for the third quarter, he added.
The final composite PMI, which tracks both the manufacturing and services sectors that together account for more than two-thirds of the German economy, fell to a final reading of 48.1, from 51.3 the month before.
It was the first time since December that the reading has fallen below the 50 mark separating growth from contraction.
(Reporting by Miranda Murray; Editing by Hugh Lawson)