Germany's services sector showed signs of stabilization in August, with the S&P Global Services Business Activity Index at 49.7, up from 49.8 in July but still below the 50.0 threshold separating growth from contraction.
The broader composite output PMI, which includes manufacturing, increased to 51.8 in August from 51.3 in July, marking the highest level in five months. The uptick was driven by the manufacturing sector, which offset continued weakness in services.
Employment in the services sector expanded for the first time in eight months, with job creation accelerating to the fastest pace since October 2025. The increase in hiring aligned with historical averages, according to S&P Global data.
New business activity in services rose for a second consecutive month, supported by the first growth in new export orders since February. The pace of new export business reached its highest level since May 2023, while backlogs of work increased for the first time since February.
Cost pressures persisted, with input prices rising at the fastest pace in three months due to higher fuel, wage, and electronic component costs. Charged price inflation moderated slightly but remained above historical norms.
Business sentiment among service providers remained optimistic for the next 12 months, though confidence dipped marginally from July's five-month high. Expectations were underpinned by hopes for easing global tensions, while manufacturers were cited as the primary driver of the composite PMI's improvement.
