From Mary Martinez
Berlin (Reuters) – Business activity in the German private sector stabilized in January, marking the end of a six -month contraction because the growth of services compensated for the continuous decline in production production, according to a study published on Friday.
HCOB German flash composite procurement manager, compiled by S&P Global, rose to 50.1 in January, compared to 48.0 in December, reaching the highest value in seven months and crossing the threshold of 50.0 which separates growth from contraction .
The analysts surveyed by Reuters predicted a 48.2 reader.
“PMI offers some hope that Germany could be dug from a recessionary phase in the last two years,” said Cyrus de la Rubia, the chief economist of the Hamburg commercial bank.
Germany’s economy decreased for the second year in a row in 2024, emphasizing the depth of the fall that engulfed the largest European economy.
The services sector has shown resistance, with a business activity index for the German sector of services climbed to 52.5 with 51.2, which is the highest result in six months and above the prediction of analysts surveyed by Reuters of 51.0.
Although it remained in the fall area, the production index improved to 44.1 with 42.5, surpassing growth expectations at 42.7.
“Production has been reduced by the fiercest rate since the mid -2024, and the situation with new orders also mitigated a little,” De La Rubia said.
Production faced significant pressure from international competition and hesitation of customers in the midst of economic and political uncertainty, although the rate of falling new export jobs was the mildest in eight months, research showed.
Despite the challenges of demand in both sectors, companies have shown increased optimism in terms of future activities, especially in production, where trust has reached the highest level in almost three years.
(Maria Martinez report; Toby Chopra Mounting)
