Germany Private Sector Activity Highest in 11 Months

The S&P Global Flash Germany Composite PMI rose to 53.8 in September 2026 from 51.8 in August and well above market expectations of 51.8, according to preliminary estimates. The reading pointed to the strongest growth in private sector activity in 11 months, reflecting a rebound in business activity across the services sector (52.9 vs 49.7) while manufacturing slowed but remained robust (53.8 vs 54.3). There was a rise in demand for goods and services, with inflows of new work increasing for the third month running and to the greatest extent since February 2022. Also, business accumulation was the quickest since May 2022, which prompted an increase in workforce for a second month. This came despite increased inflationary pressures, linked in large part to the rising price of fuel. Input costs rose at the quickest rate for four months and output costs were the highest since May. Meanwhile, expectations towards the outlook held steady.

The S&P Global Germany Composite PMI was revised up to 51.8 in August 2026, from the preliminary estimate of 51.0 and compared with 51.3 in July. The reading pointed to the strongest expansion in private-sector activity in five months, driven primarily by a marked improvement in manufacturing. The manufacturing PMI rose to a 2022 high of 54.2, up from 52.2 in the previous month. In contrast, the services sector remained in slight contraction, with its PMI edging down to 49.7 from 49.8. There were broad-based increases in both total new business and export sales in August, while business confidence also perked up, again owing to the goods-producing sector. Employment meanwhile returned to growth as a renewed upturn in services staffing levels coincided with a slowdown in factory job losses. Costs rose at the fastest rate for three months, but output price inflation eased to the weakest since March.

Germany’s flash composite PMI eased to 51 in August 2026 from 51.3 in July, below expectations of 51.3 and marking a two-month low. Growth was driven by a strong recovery in manufacturing, where output expanded at its fastest pace in more than four and a half years, with the index reaching 56.7. New orders and export sales also increased sharply, supported by stockbuilding, higher defence spending and data-centre investment. In contrast, the services sector remained weak, recording its fifth consecutive monthly decline, although the contraction was relatively modest. The labour market showed tentative signs of stabilisation, with employment broadly unchanged after more than two years of declines, as slower factory job losses offset a modest increase in service-sector hiring. Business confidence also strengthened, reaching its highest level since before the Middle East conflict began. Meanwhile, input-cost pressures eased slightly and selling-price inflation slowed to a five-month low.