Germany Composite PMI Rises in January

The HCOB Flash Germany Composite PMI increased to 53.1 in February 2026 from 52.1 in January, well above forecasts of 52.3. The reading showed that business activity growth in Germany accelerated to a four-month high, with both manufacturing (52.3 vs 51.4) and services (53.4 vs 52.4) also climbing to their strongest levels in four months. The upturn continued to be supported by stronger demand for goods and services, with inflows of new work rising for the fourth time in the past five months. The pace of job losses meanwhile remained solid, although it slowed slightly amid a stabilisation in backlogs of work and a fractional uptick in firms’ expectations for activity over the next 12 months. As for prices, the latest data indicated the steepest increase in input costs for three years which translated into another solid, albeit slightly slower, rise in average prices charged for goods and services, with the rate of inflation edging down from January’s 23-month high.

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.