Finance
German manufacturing drives modest growth in August, PMI shows
Published by Global Banking and Finance Review
Posted on August 21, 2025
2 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on August 21, 2025
2 min readLast updated: January 22, 2026
Germany's manufacturing sector fueled modest growth in August, with PMI rising to 50.9. Despite challenges, the economy shows resilience.
(Reuters) -Germany's private sector economy saw a slight uptick in growth in August, driven primarily by the manufacturing sector which experienced a rise in new orders, according to a survey on Thursday.
The HCOB Flash Germany Composite Purchasing Managers Index, compiled by S&P Global, rose to 50.9 in August from 50.6 in July, marking a five-month high and beating a Reuters poll forecast of 50.2. A PMI reading above 50 indicates growth in activity.
Manufacturing led the expansion, with its output index climbing to 52.6 from 50.6 in July, reaching a 41-month high. This growth was supported by a solid increase in new orders, the fastest since March 2022, despite a slight decrease in export sales. In contrast, the services sector saw its business activity index fall to 50.1 from 50.6, a two-month low, indicating near-stagnant growth.
Employment across Germany continued to decline, with job cuts in manufacturing outpacing a slight increase in hiring within the services sector. This marks a continuation of the downward trend in employment since June last year.
The input cost and output price indexes both experienced upticks, reversing the declines seen in July. The rise in input prices was particularly driven by the services sector, likely due to increasing wages.
"Germany’s economy has been growing throughout the summer so far, and the pace of expansion has even picked up slightly," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
"While we're talking about modest gains here, this trend signals resilience - considering the headwinds like U.S. tariffs, geopolitical uncertainty, and relatively high long-term interest rates."
(Editing by Toby Chopra)
New orders refer to the total number of new purchase orders received by manufacturers. It is a key indicator of future production levels and economic activity.
Employment trend analysis involves examining changes in employment levels over time, helping to understand job growth or decline in specific sectors, such as manufacturing or services.
Input costs are the expenses incurred by businesses to produce goods or services, including raw materials, labor, and overhead. Rising input costs can impact profitability and pricing strategies.
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