- Prior 49.7
- Final Composite PMI 50.6 vs 50.3 prelim
- Prior 50.4
Key findings:
- Inflationary pressures ease sharply to lowest since early 2021
Comment:
Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:
“Germany is entering the second half of the year with growth that, while modest, is evident across the board – both in
services and manufacturing. Slightly rising order intakes and moderately improved export business across manufacturing
and services combined paint the picture of an economy that is slowly but visibly emerging from a prolonged period of
weakness. Following the GDP contraction in the second quarter, we anticipate a return to modest growth in the third.
“In the services sector, business activity picked up again after a three-month dry spell. Particularly encouraging is the
increase in new business – the first since August 2024. Companies are also looking to the future with renewed optimism.
However, there is no sign of euphoria, and the recovery in the service sector is somewhat fragile, as backlogged orders
have shrunk and the employment growth seen since the beginning of the year has almost come to a standstill.
“Costs in the services sector rose at their slowest pace since February 2021. This aligns with the European Central Bank’s
Wage Tracker, which has shown a decline in annual wage growth since the beginning of the year – wages being a key cost
driver for service providers. In this environment, companies raised their selling prices at the weakest rate since April 2021.
For the ECB, this is welcome news, especially given Germany’s outsized influence on the Eurozone’s overall inflation rate.”
This article was written by Giuseppe Dellamotta at investinglive.com.