| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 52.5 | 52.5 to 52.5 | 52.1 | 51.3 |
| Services Index | 53.3 | 53.3 to 53.3 | 52.4 | 52.7 |
Highlights
Germany's January PMI readings showed that service sector activity remained in expansionary territory at 52.4, signalling a fifth consecutive month of growth. However, the easing from December and the four-month low suggest that momentum is softening, even as demand conditions and forward-looking confidence improve.
The most striking contradiction lies in the labour market. Despite stronger optimism, employment fell at one of the fastest rates since mid-2020. Declining backlogs across services indicate that firms are coping with current workloads without expanding capacity, encouraging workforce reductions and hiring freezes. This signals a cautious adjustment rather than distress, but it weakens the narrative of a broad-based recovery.
Cost dynamics remain a central pressure point. Input prices rose at their fastest pace in a year, driven largely by labour costs and energy, and firms responded by pushing output prices sharply higher. This reinforces inflation persistence risks, particularly within services.
At the composite level, the recovery looks more balanced. Manufacturing output rebounded, lifting the composite PMI to 52.1, while export demand stabilised. Overall, Germany enters 2026 with improving confidence and output, but job shedding and rising prices suggest growth remains fragile and unevenly distributed across the economy. These updates take the RPI to 29 and the RPI-P to 21, meaning that economic activities continue to outperform the expectations for Germany.
Market Consensus Before Announcement
No revision expected in the composite final from the flash at 52.5. No change expected in services final from the flash either at 53.3.
Definition
The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global.
Description
The Purchasing Managers Index (PMI) survey has developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the European Central Bank) use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.