German private sector downturn deepens in June, survey shows

Germany's private sector contracted at the fastest pace in 18 months in June, flash data from S&P Global showed on Tuesday.

The flash composite output index registered 48.0 in June, down from 48.8 in May. The score had been forecast to rise to 49.9. The reading was the lowest recorded since December 2024.

The latest decrease was centred on the service sector, which recorded its worst performance in over three-and-a-half years in June. The services PMI declined unexpectedly to 46.8 from 48.1 in the prior month. The expected reading had been 49.0.

At the same time, the factory PMI fell marginally to the neutral mark of 50.0 in June from 50.1 in the previous month. The score had been expected to reach 50.3.

Inflow of new business decreased for the fourth straight month and marked the biggest drop since late 2024. Employment continued to decline in June, but the pace of decrease was unchanged from May.

Regarding price pressures, the survey showed that there was a noticeable slowdown in input cost inflation which eased from a 42-month high in May. At the same time, output prices grew at the slowest rate in three months in June.

Further, there was a slight weakening of overall business expectations towards output in the next 12 months, the survey showed.