A recent report from S&P Global and Hamburg Commercial Bank (HCOB) reveals that Germany's private sector activity, although still contracting, has shown a slight improvement in December.

The HCOB Flash Germany Composite PMI Output Index, which covers both services and manufacturing business activity, increased from 47.2 in November to 47.8, marking a two-month high. This indicates a potential stabilization in the sector.

Services Sector Resilience
The HCOB Flash Germany Services PMI Business Activity Index saw a notable rise from 49.3 in November to 51 in December, reaching a two-month high. This growth suggests that the services sector is gearing up for a stronger-than-expected holiday season.

Manufacturing Sector Challenges
On the other hand, the HCOB Flash Germany Manufacturing PMI dropped to 42.5, the lowest level in three months, highlighting the ongoing struggles in the manufacturing sector.

HCOB Chief Economist Cyrus de la Rubia commented, "The improvement in services acts as a counterbalance to the accelerated decline in manufacturing output, providing hope that GDP may not have contracted in the final quarter of the year."