Germany’s Services PMI edged down to 51.7 in October 2026 from 52.9 in September, falling short of market expectations of 52.5, according to preliminary data. While the index signaled a second consecutive month of expansion, growth remained subdued as demand stagnated, weighed down by delayed customer decisions and tighter client budgets. Service providers also reported a renewed decline in backlogs of work.
Despite easing capacity pressures at the start of the fourth quarter, firms continued to add staff, extending the current hiring streak to a third month. However, employment growth was only marginal and unchanged from September.
On the price front, input cost inflation eased, in part due to fuel discounts, while service firms tempered their own price hikes amid heightened competitive pressures. Looking ahead, business confidence in the services sector strengthened to its highest level since February, pointing to improved growth expectations even as current demand remains weak and overall activity lacks strong momentum.
