Germany’s services sector showed further signs of stabilization in August, with the S&P Global Germany Services Purchasing Managers’ Index (PMI) registering 49.7, down marginally from July’s four-month high of 49.8 but remaining just below the 50.0 threshold that separates growth from contraction.
The broader S&P Global Germany Composite PMI Output Index rose to 51.8 from 51.3 in July, marking a five-month high. The increase was supported by a faster expansion in manufacturing activity, which offset a slight softening in services.
Employment levels in the services sector expanded for the first time in eight months, with the pace of hiring the strongest since October 2023 and broadly in line with the long-term average. New business inflows increased for a second consecutive month, while new export orders grew at the fastest rate since May 2023, ending an eight-month streak of decline. Outstanding business also rose for the first time since February.
Service providers maintained a positive outlook for the next 12 months, though business sentiment eased slightly from July’s five-month high. Optimism was anchored in expectations of reduced global trade tensions, while firms continued to cite elevated costs, tight financial conditions, and cautious customer spending as key challenges.
Input price inflation accelerated to the fastest pace in three months, driven by higher fuel, wage, and electronic component costs. Output price inflation, while slightly lower than in July, remained above its long-term average, indicating persistent pricing pressures across the sector.
