Germany HCOB Composite PMI declines to 47.1 in January vs. 47.8 expected

• HCOB Manufacturing PMI in Germany improved modestly in early January.
• HCOB Services PMI declined further in the contraction territory below 50.

Business activity in Germany’s private sector continued to contract at an accelerating pace in early January, with HCOB Composite PMI declining to 47.1 from 47.4 in December. This reading came in below the market expectation of 47.8.

HCOB Manufacturing PMI improved to 45.4 from 43.3 in the same period, while HCOB Services PMI dropped to 47.6 from 49.3.

Commenting on the flash PMI data, “Germany has faced a sluggish start to the new year. Services activity has not only declined for the fourth consecutive month but has also accelerated in its downturn. Manufacturing, remaining in recessionary territory for the 19th straight month, has displayed a somewhat softened downturn, as reflected in the steadily rising PMI index since August of last year,” said Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, and continued:

“Recognizing the inherent uncertainty at this early stage, our GDP Nowcast, which considers the PMI data, suggests a continuation of the recession into the current quarter, however.”

Market reaction

EUR/USD showed no immediate reaction to the PMI data and was last seen rising 0.15% on the day at 1.0870.