Downward pressure on German business activity eases in January as inflation continues to slow and optimism returns

The German services economy returned to growth in January, leaving the country’s overall private sector on a more stable footing at the start of the year, latest ‘flash’ PMI® data from S&P Global showed. Although still historically elevated, rates of inflation meanwhile continued to lose momentum, led by a notable cooling of manufacturing cost pressures as strain on supply chains eased. At the same time, there was renewed optimism among businesses towards the year-ahead outlook and signs of continued resilience in the labour market.