German service sector contraction sounds alert for recovery in eurozone Germany's services industry contracted in April for the first time in five months and a broader measure of the service industry in the 17-member eurozone remained in negative territory. The German PMI Services index, which is compiled by surveying about 1,000 German business leaders, shrank to 49.6 in April from 50.9 points in March, according to data from financial information company Markit. Any reading below 50 indicates a contraction, but the figure was better than economists' expectations of 49.2. Adding to the gloom, the eurozone service PMI reading remained below 50, but edged higher to 46.9 from March's four-month low of 46.5. "The PMI suggests that, having eased in the first quarter of the year, the eurozone's economic downturn is likely to have gathered momentum again in the second quarter," Chris Williamson, chief economist at Markit, said. He added: "Strong downturns in France, Spain and Italy have broadened out to encompass Germany again, with slumping domestic demand exacerbated by export losses due to a weakening of economic growth in other countries, such as the US and China." Mr Williamson noted that unemployment, which hit a record high of 12.1pc in March, also looks set to rise further, given the ongoing steep rate of job losses recorded in April. The gloomy data come amid concerns in France that austerity has gone too far. French finance minister Pierre Moscovici yesterday proclaimed the end of austerity and a triumph of French policy, risking further damage to the tattered relations between Paris and Berlin.