| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 49.3 | 47.9 to 50.0 | 48.0 | 48.6 |
| Manufacturing Index | 50.3 | 49.0 to 50.8 | 50.0 | 49.9 |
| Services Index | 48.5 | 46.0 to 49.5 | 46.8 | 47.8 |
Highlights
Germany's private sector entered the end of the second quarter on a weaker footing, with the composite PMI falling to 48.0 from 48.8 in May, marking an 18-month low and signalling a broadening loss of economic momentum. The deterioration was overwhelmingly driven by services, where the activity index dropped to 46.8, its weakest level in 43 months, reflecting subdued consumer and business demand amid persistent market uncertainty. Manufacturing remained comparatively resilient, with the PMI holding at the neutral 50.0 threshold and output continuing to expand modestly despite softer headline readings.
The report points to an economy facing demand-side fragility rather than supply constraints. New business contracted for a fourth consecutive month, backlogs continued to shrink, and firms maintained workforce reductions, indicating excess capacity and limited confidence in near-term recovery. Encouragingly, inflationary pressures eased, with both input costs and output prices recording business their slowest increases in several months, providing the European Central Bank with evidence that price dynamics are gradually moderating.
However, weakening business expectations and continued employment declines suggest that lower inflation alone may not be sufficient to revive activity. In essence, Germany's economy remains caught between easing price pressures and persistently weak domestic demand, leaving the growth outlook fragile despite pockets of manufacturing stability. These updates take the RPI to minus 29 and the RPI-P to minus 31, meaning that economic activities continue to lag market expectations in Germany.
Market Consensus Before Announcement
The consensus sees business activity edging up to a nearly flat showing (50 is neutral) with manufacturing showing a very modest expansion. The consensus sees the composite at 49.3 for June flash versus 48.8 in the May final. Manufacturing expected at 50.3 versus 50.1 in May 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.