Germany's Private Sector Activity Nearly Stalls

The S&P Global Germany Composite PMI was revised higher to 49.5 in June 2026 from the preliminary estimate of 48, pointing to near-stagnation in private sector activity following two consecutive months of contraction. There was a drop in new business and output, reflecting weakness in the service sector while manufacturing posted a rise in production. Meanwhile, employment fell across the board, as did rates of both input cost and output price inflation. Employment meanwhile fell across the board, as did rates of both input cost and output price inflation. Future expectations ticked down, again owing to the services sector.

The S&P Global Flash Germany Composite PMI fell to 48 in June 2026 from 48.8 in May, missing market expectations of 49.9. The reading signaled a third consecutive month of contraction in private-sector activity and the steepest decline since December 2024. The downturn was driven primarily by the services sector, where the PMI fell to 46.8 from 48.1, its lowest level in 43 months, while manufacturing output expanded at a slightly faster pace (50.8 vs 50.4). The weakness reflected subdued underlying demand, with new business inflows declining for a fourth straight month and at the fastest pace since December 2024 amid deteriorating economic conditions and heightened market uncertainty. Employment also continued to fall across the private sector. Meanwhile, inflationary pressures eased further, with both input costs and output prices rising at their slowest rates in four and three months, respectively. In addition, business expectations also weakened.

The S&P Global Germany Composite PMI was revised higher to 48.8 in May 2026 from a preliminary of 48.6 and compared to 48.4 in April, but continuing to signal a second straight month of contraction in private sector activity. The services sector continued to fall (48.1 vs 46.9) while manufacturing stalled (50.1 vs 51.4). There were broad-based decreases in new work, employment and backlogs. On the price front, input cost inflation accelerated to a 42-month high, but average charges for goods and services rose more slowly than in April. On the other hand, business expectations improved in both monitored sectors.