German Private Sector Slips Into Contraction

(RTTNews) - Germany's private sector contracted for the first time in almost a year in April, reflecting the effects of the war in the Middle East, flash survey data from S&P Global revealed Thursday.

The composite output index dropped to a 16-month low of 48.3 in April from 51.9 in the previous month.

The index fell to sub-50 contraction zone for the first time since May last year. Moreover, the score was the lowest since December 2024.

The downturn was driven by a marked reduction in service sector business activity, which registered its worst slump in almost three-and-a-half years. The services Purchasing Managers' Index declined to 46.9 from 50.9 a month ago.

At the same time, manufacturing activity growth dropped moderated in April. The corresponding index posted 51.2 compared to 52.2 in the previous month.

"The recovery in the German economy has been stopped in its tracks by the war in the Middle East," S&P Global Market Intelligence Economics Associate Director Phil Smith said.

"A ten-month sequence of growth came to an end in April as business activity contracted against a backdrop of heightened uncertainty and sharply rising prices," Smith added.