German HCOB Composite PMI Flash (Jan) 52.5 vs. Exp. 51.6 (Prev. 51.3)

“In the services sector, the situation has brightened quite a bit. Pricing power seems to have increased significantly as sales price inflation has moved up. While that partly reflects higher input costs, the rise in sales price inflation has been even stronger. With new business growing more robustly than last month, service providers are becoming more self-confident – something that also shows up in their much higher optimism for future activity. "
“Meanwhile, the International Monetary Fund has upgraded its 2026 GDP growth forecast for Germany by 0.2 percentage points to 1.1%, reinforcing the sense that growth prospects are improving. Still, the recovery remains rather fragile. The continued drop in inventories and another decline in backlogs of orders in manufacturing are clear examples. Yet, the unusually large fiscal stimulus through much higher spending on defence and infrastructure should provide a noticeable boost to the economy.”