BERLIN(Reuters) - Germany's private sector expanded at its slowest pace in 10 months in August as manufacturing grew at a weaker rate, a survey showed on Wednesday, in another sign that Europe's largest economy is running out of steam.
Markit's final composite Purchasing Managers' Index (PMI), which tracks growth in the manufacturing and services sectors that account for more than two-thirds of the economy, dropped to 53.7 in August from 55.7 the previous month.
That was above the 50 mark that denotes growth but was well below the flash reading of 54.9.
"The composite PMI data are currently still signalling an expansion in German GDP in the third quarter, following the surprise drop in Q2," said Markit economist Oliver Kolodseike.
"It is, however, very unlikely that growth will be as strong as seen in the opening three months of the year."
The economy shrank by 0.2 percent in the second quarter due to weak investment and slow trade. Some economists have warned there is a risk Germany will fall into recession in the July-September period.
An index tracking the services sector alone slipped to 54.9 in August from July's 37-month high of 56.7.
New work in the services sector flowed in faster than in the previous month, and firms also tackled backlogs of work, leading to a slight rise in employment for the 10th consecutive month.
But business expectations were at an 11-month low, with some survey respondents pointing to a slower economy at home, a planned minimum wage and increasing global insecurity.
Firms were also squeezed as their input costs rose more sharply than their output prices.
(Reporting by Michelle Martin; Editing by Stephen Brown and; Hugh Lawson)