Financial News: German Private Sector Returns To Growth

German Private Sector Returns To Growth

06/23/2025 - 06:01:00 (RTTNews)

(RTTNews) - Germany's private sector returned to growth in June, led by the manufacturing sector, flash data from S&P Global revealed on Monday.

The HCOB composite output index stood at 50.4 in June, rebounding from a five-month low of 48.5 in May. A reading above the neutral 50.0 level signals expansion in the sector.

Growth in manufacturing output was partly offset by a slower reduction in services activity.

Manufacturers reported its strongest rise since March 2022. At the same time, the drag from the services activity eased with the latest fall marking the slowest in the current three-month sequence of contraction.

The flash services Purchasing Managers' Index hit a three-month high of 49.4 in June compared to 47.1 a month ago. The score was seen at 47.8.

At 49.0, the factory PMI rose to a 34-month high from 48.3 in May. The reading was also above expectations of 48.9.

"It looks like Germany's manufacturing sector might finally be turning a corner," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.

"There is a decent chance Germany could finally break out of the frustrating stop-start growth pattern it's been stuck in for the past two years - one quarter of growth followed by another of contraction," de la Rubia added. Total inflows of new work across the private sector increased for the first time since May last year.

Firms continued to trim workforce numbers and were a little less optimistic about the year-ahead growth outlook than the month before.

On the price front, the survey showed that the rate of inflation in average charges for goods and services ticked up from May's seven-month low. That was despite firms' input costs rising at the slowest rate since October last year.

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