21-Aug-2025 13:41

Business activity rose for the third straight month across the German private sector in August, with the pace of growth ticking up to the quickest since March but remaining only modest.

The upturn in output continued to be led by the manufacturing sector, which recorded its strongest increase in production for almost three-and-a-half years.

By contrast, there was a further modest fall in employment amid a lack pressure on capacity, and a slight softening of firms' growth expectations. Rates of input cost and output price inflation meanwhile ticked up from the recent lows seen in July.

The HCOB Flash Germany Composite PMI Output Index came in at 50.9 in August, up slightly from 50.6 in July. The latest reading was the highest recorded since March, although it was still indicative of only a modest rate of expansion and below the long-run average (52.6).

Solid and accelerated production growth in the manufacturing sector (index at 52.6), which was supported by increased factory new orders, compared with near-stagnant levels of activity in the service sector (index at 50.1).

August saw another marginal rise in the level of new business across the German private sector, in line with the trend seen in each month since June. Employment fell modestly across the eurozone's largest economy in August, extending a sequence of decline that stretches back to June last year.

Latest data meanwhile showed another broad-based decrease in backlogs of work across the German private sector. After reaching a six-month high in July, German business expectations retreated somewhat in August.

Turning to prices, August's flash survey indicated upticks in the rates of both input cost and output price inflation, which had registered at their lowest levels for ten and nine months respectively in July.

After reaching a six-month high in July, German business expectations retreated somewhat in August.

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