| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 53.1 | 53.1 to 53.1 | 53.2 | 52.1 |
| Services Index | 53.4 | 53.4 to 53.4 | 53.5 | 52.4 |
Highlights
Germany's service sector showed a renewed strengthening in February, with the services PMI rising to 53.5, its highest level in four months. This improvement points to a firming demand environment, supported by stronger client acquisition, the securing of large projects, and a notable rebound in foreign orders. As a result, the composite output index increased to 53.2, underscoring the role of services as a key driver of near-term economic momentum.
However, the expansion continues to be accompanied by a notable divergence in labour market dynamics. Despite rising activity, a marginal increase in backlogs, and business confidence remaining above its long-run average, service sector employment declined at its fastest pace since mid-2020. Elevated cost pressuresparticularly wage-relatedappear to be constraining hiring decisions, prompting firms to prioritise efficiency gains, capacity optimisation, and greater reliance on automation and artificial intelligence.
Inflation developments further nuance the outlook. While input cost pressures remain historically high, their slight moderation has allowed firms to temper the pace of output price increases. Overall, the picture is one of cautious expansion, as demand conditions are supportive but cost constraints are driving a more selective, productivity-focused adjustment rather than broad-based employment growth. This update puts the RPI at minus 15 and the RPI-P at minus 4, indicating that economic activity continues to lag market expectations in Germany.
Market Consensus Before Announcement
The consensus sees no revision in the final from the flash at 53.1 for composite and 53.4 for services in the February final.
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.