German Private Sector Activity Returns to Growth

The S&P Global Flash Germany Composite PMI rose to 51.2 in July 2026 from 49.5 in June, beating forecasts of 49.8. It is the highest reading in four months, with the private sector activity moving back to growth after three straight months of contraction, driven by a marked upturn in manufacturing production and a nearly stagnation in services. There was also a renewed increase in new export orders and firms were slightly more optimistic about the year-ahead outlook for activity, which was reflected in a slowdown in the pace of job losses. As for prices, there was a slightly faster rise in input costs, owing to increased pressures facing services firms. Average prices charged for goods and services meanwhile rose at the slowest rate for four months. Despite the July improvement, the path to a sustainable recovery still seems very much uncertain. given the escalating hostilities in the Middle East, which have put renewed upward pressure on global energy prices

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.