German business activity keeps expanding in January, though job numbers decline once again

Germany’s Service Sector Growth Slows at Start of Year

According to the latest HCOB PMI® survey, Germany’s service industry continued to expand as the new year began, though the pace of growth in business activity dropped to its lowest level since last September. Companies noted stronger demand and expressed greater confidence about future prospects compared to the previous month.

Despite this improved sentiment, employment in the service sector declined again in January, with job losses occurring at one of the fastest rates seen since the pandemic began. At the same time, businesses faced a significant rise in costs, prompting them to increase their prices for services. Both input and output price inflation remained elevated.