Economic Buzz: German PMI slows to 51.9 in March as services weaken and costs surge

Germany?s private sector growth lost momentum in March, with overall activity expanding at its slowest pace since December. The S&P Global Flash Germany Composite PMI fell to 51.9 from 53.2 in February, reflecting weaker performance mainly in the services sector.

Service activity growth eased to a modest level, marking its weakest expansion in seven months. In contrast, manufacturing showed improvement, with production rising at the fastest pace in over four years, supported by stronger new orders. Some firms reported increased demand as clients sought to avoid supply disruptions linked to the Middle East conflict.

However, total new business declined slightly for the first time in three months, as a drop in services demand outweighed gains in manufacturing. Businesses cited uncertainty, tighter financial conditions and rising costs as key concerns.

Cost pressures intensified sharply, with input prices rising at the fastest rate in over three years. Higher energy, fuel, transport and raw material costs were widely reported. Although companies raised selling prices, the increase was slower than the rise in costs.

Employment continued to decline across the private sector, though at a slightly slower pace. Business confidence also weakened, falling to its lowest level in nearly a year due to ongoing geopolitical and economic uncertainties.

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