Private Sector Activity Declines

The latest preliminary report from S&P Global and Hamburg Commercial Bank (HCOB) reveals a concerning downturn in Germany's private sector activity for March. The Composite PMI Output Index fell to 49.7, down from 51.3, signaling a four-month low and entering contraction territory.

Sector-Specific Challenges

Highlighting the downturn, the Services PMI Business Activity Index plummeted to 48.8, marking its lowest point in 14 months. On the manufacturing front, the Output Index slightly decreased to 51.6 from 52.1, with the Manufacturing PMI also dipping to 48 from 48.3 in March.

Expert Insights

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented on the resilience of manufacturers amidst rising output and export orders. However, he pointed out the sharp decline in optimism among service firms, with sentiment reaching its lowest since September 2023.