Germany private sector growth hits 11-month high as services rebound, PMI shows

Germany's private sector showed its strongest growth in nearly a year in September, a business survey revealed. The S&P Global Flash Germany Composite PMI Output Index climbed to 53.8, up from 51.8 in August, marking its highest level since October 2025. This figure above 50 indicates expansion. Meanwhile, services activity surged to a seven-month high at 52.9, compared to 49.7 in August.

Manufacturing output, however, slightly declined to 55.9 from 56.6. New orders surged for the third consecutive month, the fastest pace since February 2022, fueled by increased investment and exports. Backlogs also expanded for the second month, reaching their fastest pace since May 2022 and intensifying capacity pressures. Employment increased for the second month in a row, with job creation accelerating to its quickest pace in over three years.

Hiring predominantly focused on the service sector, while manufacturing employment decline slowed to its weakest since September 2023. However, input costs rose at their fastest pace in four months, and prices charged for goods and services increased faster, hitting their highest level since May due to services-related factors. The flash data highlighted the strongest rise in business activity in almost a year, with the service sector finally joining manufacturing in growth.

Phil Smith, economics associate director at S&P Global Market Intelligence, noted that rising inflows of new work were beginning to strain business capacity, contributing to the surge in backlogs and bolstering labor-market conditions. Despite this, businesses' expectations for output over the next 12 months remained unchanged from August, remaining at their highest level since before the Middle East war began in February.