BERLIN, June 23 (Reuters) - The rate of contraction in Germany's private sector accelerated slightly in June, a survey showed on Tuesday, adding to signs that Europe's largest economy faces a bumpy recovery from a record recession.
A flash estimate of the Markit composite purchasing managers' index (PMI), which surveys the service and manufacturing sectors, fell to 43.4 from a seven-month high of 44.0 in May.
The dip interrupted a three-month run of modest improvements in the index, sending it deeper below the 50 mark which separates growth from contraction. The fall underlined the likelihood of a long convalescence for Europe's largest economy.
"There is lots to suggest that the recovery is going to be a difficult one and these data really highlight those concerns," said Chris Williamson, chief economist at Markit.
"We may see some plateauing and ... the economy still contracting as we move through the rest of the year," he added.
Signs of excess capacity continued in June, shown by a further steep decline in backlogs of work. However, there were slower reductions in both manufacturing and service sector employment, with the overall rate of job shedding the weakest since January.
The German economy shrank by a record 3.8 percent in the first quarter of this year, and the Economy Ministry has said a further contraction is likely in the second quarter.
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"Therefore we can realistically hope that we're now approaching the low point," Loescher said.
"However, it is still very difficult to predict how long the economy will remain at this depressed level, and when and at what rate of incline it will once again rebound," he added.
Other economic reports have also pointed to a slow recovery.
On Monday, Ifo economist Klaus Abberger said the economy is in a process of stabilisation but has not yet reached the turning point towards recovery. The Bundesbank said the economy will not bottom out before mid-year.
A flash manufacturing PMI index rose to 40.5 from 39.6 in May. By contrast, the flash services PMI reading fell to 44.3 from 45.2 last month.
PMI data on the manufacturing sector showing the ratio of new orders to stocks of finished goods dipped to 1.12 after rising to 1.18 in May.
"That ratio remains at a level that is consistent with a further recovery of output," Williamson said.
"It's questionable whether it's signalling any return to manufacturing output growth but it certainly supports the view that we will continue to move in a positive direction, it's just going to be a long, slow process," he added.