| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 51.5 | 52.1 | ||
| Manufacturing Index | 48.7 | 48.4 to 48.9 | 47.7 | 48.4 |
| Services Index | 53.0 | 52.5 to 53.4 | 52.6 | 52.7 |
Highlights
Germany's private sector revealed that momentum is fading across both services and manufacturing. The composite PMI slipped to 51.5 in December from 52.4 in November, a four-month low that signals continued expansion, but at a clearly slower pace. Services remained the main support, with the business activity index easing to 52.6 from 53.1, 0.4 points below the consensus forecast and its weakest reading in three months and close to the long-run average. Manufacturing, however, moved deeper into contraction, as the PMI fell to 47.7 from 48.2, a ten-month low and a point below the consensus forecast.
Underlying demand remains fragile. New business inflows stagnated in December, with service-sector gains weakening and factory orders falling for the third time in four months at the fastest rate since January, partly driven by declining export sales. Firms increasingly relied on backlogs to sustain output, even as order books continued to shrink.
Confidence has also deteriorated. Growth expectations dropped to an eight-month low, reflecting economic uncertainty and geopolitical risks, although sentiment among manufacturers improved to a six-month high. At the same time, inflationary pressures re-emerged, with faster increases in service prices and the first rise in manufacturing input costs since January 2023, pointing to renewed cost and supply-chain pressures.
Market Consensus Before Announcement
Manufacturing seen at 48.7 in the December flash versus 48.2 in November. Services expected at 53.0 versus 53.1 in November.
Definition
The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector business activity by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around ten days ahead of the final report and are typically based upon around 85 percent of the full survey sample. Results covering a range of variables including manufacturing output, employment, new orders, backlogs and prices are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.
Description
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.