FX.co ★ German Service Sector Contracts in August

In August 2025, the HCOB Germany Services PMI registered at 49.3, marking a significant decline from July's 50.6 and falling short of the preliminary forecast of 50.1. This downturn indicates that the German services sector has slipped back into contraction, primarily due to a renewed decrease in new business and a halt in hiring activities. On the pricing front, input cost inflation gained momentum from a 53-month low observed in July, largely attributed to wage pressures. As a result, output prices also saw a rise in August, recovering from the previous month's lowest level since April 2021. Nevertheless, business expectations remained relatively steady, with companies maintaining a marginally more positive outlook on future growth compared to the historical average.