2026-02-04 08:55:00
- Prior 52.7
- Final Composite PMI 52.1 vs 52.5 prelim
- Prior 51.3
Key findings:
- Employment falls at joint-fastest rate since June 2020
Comment:
Commenting on the PMI data, Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:
“Without the service sector, Germany’s economy would look in an even worse state than it is currently portrayed in the
ongoing debate. In January, service providers ensured that the economy as a whole grew, with the service sector continuing
to do most of the heavy lifting. Continued growth in the service sector can be expected in the coming months, as new
business has increased for the fourth month in a row. For the first time since mid-2023, orders from abroad are playing an
important role in supporting growth. In general, the mood in the service sector appears to be relatively good, which is
underlined by the fact that companies are much more confident about the future than they were a month ago. The
corresponding index has risen to its highest level since May 2024.
“Service providers clearly feel able to charge higher prices for their services, which is a sign of strength. This observation
supports the theory that the economy is on the upswing, as higher prices can usually be best enforced during an economic
upturn. Although part of the increase in sales prices is also due to higher cost inflation, the jump in inflation in sales prices is
greater than that of costs. On average, companies have therefore probably succeeded in achieving slightly higher profit
margins.
“The fairly sharp decline in employment in the service sector is somewhat surprising after workforces grew for most of last
year, especially since business activity has increased. We do not see this development as the beginning of a trend, although
it cannot be ruled out that many companies are considering strategies for boosting productivity, i.e., maintaining at least
constant business activity with fewer staff, which likely includes the use of artificial intelligence.
