Germany Composite PMI

The HCOB Germany Composite PMI increased to 52.1 in January 2026 from 51.3 in December, but remained slightly below a preliminary estimate of 52.5, as a rebound in manufacturing production offset slower growth in services activity. Total new business expanded for the third time in four months, supported by a broad stabilization in export sales. Workforce numbers continued to decline, alongside further reductions in backlogs across both manufacturing and services. On the price front, average input costs rose at the fastest pace in nearly three years, while output charge inflation jumped to a 23-month high, driven mainly by higher service-sector prices as factory gate charges declined further. Business sentiment climbed to its highest level since May 2024.

The HCOB Flash Germany Composite PMI rose to 52.5 in January 2026, its highest level in three months, up from 51.3 in December and well above expectations of 51.6. The reading points to a strengthening in private-sector activity, driven primarily by faster growth in the services sector (53.3 vs 52.7), while manufacturing production returned to growth (50.5 vs 48.3). The improvement was underpinned by a renewed increase in new order inflows while business sentiment also strengthened markedly to the highest level since February 2022. However, there was a deterioration in labour market conditions, with employment declining at the fastest pace since mid-2020 across both services and manufacturing. In addition, businesses faced a sharp and accelerating rise in input costs, marking the strongest inflationary pressure in nearly three years. This fed through to a notable increase in output prices, which rose at their fastest pace since May 2023.

The HCOB Germany Composite PMI fell to 51.3 in December 2025, down from 52.4 in November and slightly below the preliminary estimate of 51.5, signaling a second consecutive month of slowing growth in Europe’s largest economy. The services sector continued to expand, albeit at a slower pace, while the manufacturing sector deepened its contraction. New business declined again, driven largely by a sharp drop in manufacturing orders. Export sales weighed on activity, falling for the fifth consecutive month. Employment continued to contract, and backlogs of work edged down modestly, suggesting limited pressure on capacity. Input costs rose at their fastest pace in nearly a year, while average prices charged for goods and services remained unchanged from the previous month. Finally, business sentiment weakened further, with expectations slipping to an eight-month low.