German Services Sector Returns to Growth

The S&P Global Germany Services PMI rose to a 7-month high of 52.9 in September 2026 from 49.7 in August. The reading was also well above the market expectation of 50, signalling a renewed expansion in business activity after five consecutive months of contraction. New business accelerated at its fastest pace in almost a year, while outstanding business increased for a second consecutive month. The accumulation of unfinished orders and projects was the strongest since May 2022, indicating improving demand and pressure on capacity. Service providers also increased hiring during the month. On the price front, inflation accelerated as services firms raised prices more sharply. Despite the stronger activity and demand indicators, business sentiment weakened slightly in September, suggesting some caution about the outlook.

Germany’s S&P Global Flash Services PMI was revised higher to 49.7 in August 2026 from a preliminary estimate of 48.5, but remained slightly below July’s four-month high of 49.8. This marked the fifth consecutive month of contraction in the sector, though some signs of improvement emerged, with new orders rising for a second consecutive month, partly reflecting stronger demand from abroad. New export business rose for the first time since February and at the quickest pace since May 2023. This encouraged firms to take on additional staff for the first time in eight months, with the pace of job creation the fastest since October last year. On the cost front, input prices rose at the fastest rate in three months. Output charge inflation, meanwhile, eased slightly, although it remained comfortably above its long-run average. While sentiment fell slightly from July’s five-month high, service providers remained optimistic about the outlook for business activity in the year ahead.

Germany's S&P Global Flash Services PMI fell to 48.5 in August 2026 from 49.8 in July, missing market expectations of 50.1, preliminary data showed. The reading marked the fifth consecutive month of contraction and the fastest pace since May, pointing to continued weakness in the services sector. The decline came even as new orders increased modestly for a second consecutive month and firms raised staffing levels for the first time in eight months. Meanwhile, backlogs of work declined at a slower pace. On the price front, the rate of inflation in services output prices moderated, which could support demand in the months ahead by easing cost pressures on customers. Business confidence was unchanged from July, indicating that firms remained optimistic about the outlook for activity over the coming year.