The HCOB Germany Composite PMI was revised upward to 51.3 in March 2025, from the preliminary reading of 50.9, and compared to 50.4 in February. This marked the strongest expansion in the German private sector in ten months, signaling a modest yet encouraging recovery.
Germany composite PMI revised higher in March
The data revealed a significant easing in the manufacturing downturn, with the sector improving to 48.3 from 46.5 in February, and production rising for the first time in nearly two years. This improvement suggested that the manufacturing sector, which had been in contraction for an extended period, was finally showing signs of stabilization.
Meanwhile, the services sector saw a slight moderation in growth, dipping to 50.9 from 51.1, indicating that while activity continued to expand, the pace had slowed. A slight uptick in new orders for manufacturing was more than offset by a reduction in new business for service providers, leading to a modest overall decline in new work across both sectors. Total export sales also declined, reflecting weaker global demand, though the slowdown was less pronounced than in previous months.
Employment levels improve
Employment trends showed a positive shift, with job shedding in the manufacturing sector easing to its lowest level in ten months, while the services sector reported a slight increase in hiring. This suggests a more balanced labor market, where manufacturing job losses were more contained, and the services sector was benefiting from a pick-up in demand for workers.
On the price front, inflationary pressures eased somewhat. Both input costs and output prices rose at a slower pace in the services sector, contributing to a moderation in overall price pressures. In manufacturing, discounting eased, suggesting that producers were facing less competitive pressure to lower prices. Lastly, the data indicated a broad-based improvement in business expectations for future activity, with firms generally more optimistic about the economic outlook, though concerns over external challenges like global trade tensions and inflationary pressures remained in the background.
