Germany’s private sector economy showed a slight increase in growth in August, supported mainly by the manufacturing sector, which saw a rise in new orders, according to survey data released Thursday.
The HCOB Flash Germany Composite Purchasing Managers Index (PMI), compiled by S&P Global, climbed to 50.9 in August from 50.6 in July, its highest level in five months and above the Reuters forecast of 50.2. A reading above 50 signals growth.
Manufacturing led the expansion, with its output index jumping to 52.6 from 50.6, the strongest level in 41 months. New orders rose at the fastest pace since March 2022, despite a slight fall in export sales. In contrast, the services sector slowed, with its activity index edging down to 50.1 from 50.6, signaling nearly flat growth.
Employment trends remained weak. Job losses in manufacturing outweighed modest hiring in services, continuing the employment decline seen since June 2024.
Both input costs and output prices rose, reversing July’s declines. The increase was led by the services sector, where higher wages contributed to rising input prices.
“Germany’s economy has been growing throughout the summer, and the pace of expansion has picked up slightly,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. He noted that, while growth is modest, the trend shows resilience despite U.S. tariffs, geopolitical risks, and higher long-term interest rates.
