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

Germany's private sector activity expanded at its fastest rate in nearly a year in September, driven primarily by an unexpected rebound in the service sector. According to the S&P Global survey, the Flash Germany Composite PMI Output Index climbed to 53.8 from 51.8 in August, marking its highest level since October 2025. The services activity index rebounded to 52.9 from 49.7, entering expansion territory after five consecutive months of contraction. Meanwhile, the manufacturing sector showed slight moderation, with the headline manufacturing PMI slipping to 53.8 from 54.3 and manufacturing output easing to 55.9. Across the broader economy, new orders advanced for a third consecutive month at the quickest pace since February 2022, boosted by solid investment spending and export demand. Employment growth also accelerated to a three-year high. However, mounting cost pressures emerged as a key risk. Input costs and average selling prices accelerated at their fastest pace in four months, driven by higher fuel and energy expenses, indicating that persistent inflationary pressures could influence monetary policy expectations across the eurozone.