| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 53.1 | 52.5 | ||
| Manufacturing Index | 49.8 | 49.3 to 50.0 | 50.7 | 48.7 |
| Services Index | 52.5 | 52.3 to 53.0 | 53.4 | 53.3 |
Highlights
Germany's latest PMI release signals a cautiously broadening recovery that is gaining traction but not yet fully stabilised. February's composite PMI of 53.1 marks a four-month high, with growth supported by firmer domestic and external demand. Notably, manufacturing crossed back above the neutral 50 threshold for the first time in over three-and-a-half years, suggesting the sector is shifting from contraction to tentative expansion. This manufacturing rebound is strategically significant because it coincides with the strongest rise in factory orders in almost four years and improved export demand.
Yet the expansion is uneven. Services remain the primary growth engine, but they are simultaneously shedding labour at the fastest pace since mid-2020, reflecting cost containment pressures linked to elevated wages and inputs. Manufacturing job losses are easing, hinting at stabilising capacity utilisation.
Inflation dynamics present a mixed signal as input costs are rising at a three-year high, while output price inflation has softened slightly, suggesting margin compression risks.
In essence, the latest PMI updates suggest the economy is transitioning from fragile stabilisation to early-cycle recovery. Momentum is strengthening, confidence is improving, and external demand is returningbut persistent cost pressures and labour adjustments indicate that the expansion in Germany remains tentative rather than fully entrenched.
Market Consensus Before Announcement
Manufacturing PMI is seen at 49.8 in February flash versus 49.1 in January final. The services PMI is seen at 52.5 in February flash versus 52.4 in January final.
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.