German Business Activity Stabilizes, Ending Six-Month Contraction
Business activity in Germany's private sector stabilized in January, breaking a six-month decline. The HCOB German flash composite Purchasing Managers' Index rose to 50.1 from 48.0 in December.
Services growth offset a continued decline in manufacturing output. The services activity index reached 52.5, while manufacturing remained in contraction territory at 44.1.
Analysts attributed the improvement to easing new export business declines and increased firm optimism about future activity. Notably, manufacturing confidence hit a nearly three-year high.
Chief economist Cyrus de la Rubia said the PMI suggests Germany may emerge from recession, though challenges remain. The economy contracted in 2024 due to international competition and economic uncertainty.