FX.co ★ Germany Services Activity Drops to 30-Month Low

The HCOB Germany Services PMI fell to 47.2 in May 2025, down from 49 in April, as indicated by flash estimates, which were in contrast to market predictions of 49.5. This represents the second month in a row of contraction and the most significant decline since November 2022. New orders experienced a decline for the ninth consecutive month, with demand showing the most severe reduction since September of the previous year, largely due to reported customer uncertainty. On a positive note, service providers maintained their hiring activities in May, contributing to a reduction in the overall backlog of work. In terms of pricing, the inflation rate for service output prices reached a seven-month low, although it remained significantly higher than the long-term average. Furthermore, expectations for output in the coming 12 months increased slightly; however, the level of optimism remains considerably below the long-term average.