German business activity expands at a faster pace in January, though employment conditions worsen

German Private Sector Sees Renewed Growth at Start of Year

At the beginning of the year, Germany’s private sector experienced a noticeable rebound in business activity, as revealed by the latest preliminary HCOB PMI® survey. Output expanded at its fastest pace in three months, driven by a fresh surge in new orders.

Although business confidence for the coming year showed signs of improvement, January brought challenges in the labor market. Employment numbers declined at their sharpest rate since mid-2020, affecting both the services and manufacturing industries.

Additionally, the most recent figures highlighted a significant and faster increase in input costs for businesses.