22-May-2025 13:35

Latest HCOB flash PMI survey data, compiled by S&P Global, showed a fall in business activity across Germany in May, reflecting a deepening downturn in the country's service sector.

The contraction came despite further growth in manufacturing production, which was boosted in part by a rise in new export orders. Business expectations improved from April's recent low, but employment nevertheless fell slightly on the month.

On the price front, May saw the rate of inflation in average charges for goods and services ease to a seven-month low, with slower service sector price increases coinciding with a renewed decline in manufacturing factory gate charges.

The HCOB Flash Germany Composite PMI Output Index registered at 48.6 in May, down from 50.1 in April. This signalled a modest reduction in private sector business activity, and the first contraction so far this year.

The faltering performance was driven by a deepening down in service sector business activity which, amid a sustained weakening of demand, fell for the second month running and at the quickest rate for two-and-a-half years (index at 47.2).

Manufacturing production, on the other hand, rose for the third straight month, albeit with the rate of growth easing to only a modest pace that was the weakest in this sequence (index at 51.5).

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