German Private Sector Activity Contracts Again in May
The German composite flash PMI rose slightly to 48.6 in May but remained below the 50.0 growth threshold for a second month. Service sector weakness and rising energy costs linked to the Strait of Hormuz closure are driving the economic contraction.
Germany private sector activity contracted for a second consecutive month in May as geopolitical conflict stalled the national economic recovery. The S&P Global composite flash PMI rose to 48.6 from 48.4 in April, remaining below the 50.0 growth threshold. The data suggests the euro zone's largest economy is on track to contract during the second quarter.
### Services and Manufacturing Lead Broad Decline The downturn was driven primarily by the service sector, where business activity decreased for the second straight month. While the services PMI rose to 47.8 from 46.9, it failed to reach expansion territory. Manufacturing also stalled as its index fell to 49.9 from 51.4 in April, erasing previous gains from inventory building.
