Finance
German services sector growth slows as demand remains subdued, PMI shows
Published by Global Banking & Finance Review®
Posted on March 5, 2025
2 min readLast updated: January 25, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on March 5, 2025
2 min readLast updated: January 25, 2026
Germany's services sector growth slowed in February due to weak demand, with the PMI index dropping to 51.1. New orders continued to decline, affecting business sentiment.
BERLIN (Reuters) - Business activity in Germany's services sector grew for the third consecutive month in February, but the pace of expansion slowed due to subdued demand, S&P Global reported on Wednesday.
The final and seasonally adjusted HCOB index for business activity in the services sector stood at 51.1 in February, down from 52.5 in January. While a reading above 50 indicates growth, the drop suggests there was only a marginal increase in activity.
New orders fell again as tight budgets and production cuts among manufacturing clients weighed on demand. This marked the sixth consecutive month of declining orders, though the rate of decline was the smallest in the current contraction phase, partly due to a less pronounced drop in export orders.
Service providers focused on clearing backlogs, with the pace of backlog reduction accelerating to its fastest since mid-2020.
Employment growth continued for the second month, but at a slower rate than in January, with some firms citing strategic hires, particularly in sales.
Overall, business sentiment for the year ahead was less optimistic than in January, with the forward-looking index falling below its long-term trend.
Some respondents expressed hope for an economic upturn following the formation of a new government, but high prices and a skilled labour shortage remained concerns.
(Reporting by Reuters; Editing by Hugh Lawson)
The final and seasonally adjusted HCOB index for business activity in the services sector stood at 51.1 in February, down from 52.5 in January.
New orders fell again, marking the sixth consecutive month of declining orders, as tight budgets and production cuts among manufacturing clients weighed on demand.
Employment growth continued for the second month, but at a slower rate than in January, with some firms citing strategic hires, particularly in sales.
Overall, business sentiment for the year ahead was less optimistic than in January, with high prices and a skilled labour shortage remaining concerns.
Some respondents expressed hope for an economic upturn following the formation of a new government, despite ongoing concerns about high prices and labor shortages.
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