German Business Activity Loses Momentum as Growth Slows in December

Germany’s private sector growth lost more momentum in December, marking the second straight month of deceleration, according to a PMI survey. The HCOB flash composite Purchasing Managers’ Index fell to 51.5 from 52.4 in November, its lowest level in four months, though it remained above the 50 mark that signals expansion for a seventh consecutive month.

The slowdown was driven by weaker performance in both services and manufacturing. Services activity eased to its weakest pace since September, with slower growth in new business, while manufacturing output and new orders declined more sharply. The manufacturing PMI slipped further into contraction at 47.7, weighed down by falling export demand and reduced factory activity.

Business confidence dropped to an eight-month low amid economic and geopolitical concerns, even as manufacturing sentiment improved slightly on hopes linked to government infrastructure projects, bureaucracy reforms, and defence expansion. Employment in the private sector continued to fall, though at a slower pace, as job gains in services partly offset softer staffing levels in manufacturing.

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