The German services sector experienced a slowdown in March, with the Services PMI Business Activity Index coming in at 50.9, down from 51.1 in February, according to a report released by S&P Global and Hamburg Commercial Bank on Thursday. The figure marks a four-month low.

The report also revealed that Germany's Composite PMI Output Index stands at 51.3, up from 50.4 in February, marking a 10-month high. Rates of input cost and output price inflation ease to five-month lows.

"The service sector seems to be losing momentum, though it was not exactly racing ahead before. Still, the near-stagnation that can now be observed in business activity should not be over-interpreted. Over the past couple of years, there have been several short phases where service providers dialled things back, only to bounce back into growth mode a few months later," Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said.