FX.co ★ German Business Activity Returns to Growth in June

In June, the HCOB Flash Germany Composite PMI Output Index rose to 50.4 from May's figure of 48.5, surpassing the anticipated 49 and signaling a modest return to economic growth. This increase marks Germany's first expansion in six months, primarily fueled by a surge in manufacturing output, which reached a peak not seen since March 2022, with a reading of 52.6, and continuing a four-month growth trend. Although the services sector continued to contract, the rate of decline slowed, with activity decreasing only marginally. Notably, new orders increased for the first time in over a year, indicating a resurgence in demand. Despite these positive developments, companies continued to reduce their workforce, and confidence in future growth saw a slight dip. On the inflationary front, output prices accelerated faster than in May, though they remained near historical norms. Meanwhile, input cost inflation slowed to its lowest level since October 2023, offering some cost relief despite a minor uptick in selling prices.