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Economic Buzz: German business activity growth quickens in January
23-Jan-2026 14:09
Business activity growth regained some momentum across Germany's private sector at the start of the year, according to the latest 'flash' HCOB PMI survey, with output levels rising at the quickest rate for three months.

The upturn was supported by a renewed increase in inflows of new orders. However, despite business expectations for the year ahead also improving, January saw a deterioration in labour market conditions as employment fell at the quickest rate since mid-2020 and across both services and manufacturing.

The latest data meanwhile showed a steep and accelerated rise in businesses' input costs, which recorded the strongest rate of inflation for almost three years. This in turn contributed to a notable uptick in the rate of increase in output prices to its highest since May 2023.

The HCOB Flash Germany Composite PMI Output Index came in at 52.5 in January, up from 51.3 in December and the highest for three months. The latest reading was broadly in line with the series long-run average.

Growth was led by the service sector, which recorded a solid increase in business activity that was the quickest since last October (index at 53.3). Manufacturing production meanwhile returned to growth after slipping into contraction for the first time in ten months in December, albeit registering only a marginal expansion (index at 50.5).

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