German PMI Strengthens, But There Are “Scary” Signs on Jobs
Germany's services PMI rose to 53.3 in January 2026 (from 52.7), higher than expected, indicating a strengthening service sector.
Business activity grew at its fastest pace since October, driven by a solid increase in new orders—including demand from abroad. Corporate confidence also improved, with expectations for the next 12 months becoming more optimistic.
However, there was a dark side: labor conditions actually worsened. Employment in the service sector fell by the most in more than five and a half years. At the same time, cost pressures rose again—input price inflation hit an 11-month high, and companies were more aggressive in raising selling prices.
The broader picture also improved. The composite PMI rose to 52.5 (a three-month high), as services strengthened and the manufacturing contraction eased (to 48.7 from 47.0). However, the market needs to be vigilant because job losses are occurring in services and manufacturing, while cost pressures are said to be the strongest in nearly three years and contributing to output price inflation rising the fastest since May 2023.
Source: Newsmaker.id
