Economic Upturn in Germany

In a promising sign of economic recovery, Germany's HCOB Flash Germany Composite PMI Output Index climbed to 50.1 in January, up from December's 48.0, marking a seven-month high. This improvement, as reported by S&P Global and Hamburg Commercial Bank (HCOB), was primarily driven by a significant rebound in the services sector.

Services Sector Leads the Way

The services sector's Business Activity Index rose to 52.5, reaching its highest level in six months. This sector's growth was accompanied by a slight increase in employment, the first in seven months, indicating a growing optimism among services companies.

Manufacturing Sector Shows Signs of Recovery

Meanwhile, the manufacturing sector also displayed signs of recovery, with its Manufacturing PMI Output Index increasing to 45.2, an eight-month high. Despite remaining in contraction territory, the sector's output is shrinking at the slowest rate since mid-2024, and the new order situation has slightly improved.

Expert Commentary

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, noted, "The shift towards optimism is highlighted by a much better outlook on future activity, which goes hand in hand with the German DAX index outperforming the US-based S&P 500 in January."