German Private Sector Growth Accelerates

(RTTNews) - Germany's private sector grew at a faster pace in January, driven by higher output and renewed rise in new orders, flash survey data from S&P Global revealed Friday.

The HCOB composite output index posted 52.5 in January, a three-month high, exceeding the forecast of 51.8 from 51.3 in December.

Growth was led by the service sector, which registered a solid increase in business activity that was the quickest since last October. Meanwhile, manufacturing production returned to growth after slipping into contraction for the first time in ten months in December.

The services PMI advanced unexpectedly to 53.3 from 52.7 in the previous month. The score was forecast to fall to 52.6.

The manufacturing PMI rose to a three-month high of 48.7 from 47.0 in the prior month. However, the score remained below the neutral 50.0 mark indicating contraction. The reading was seen falling to 47.8.

"The International Monetary Fund has upgraded its 2026 GDP growth forecast for Germany by 0.2 percentage points to 1.1 percent, reinforcing the sense that growth prospects are improving," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia noted. "Still, the recovery remains rather fragile," de la Rubia added.