FX.co ★ Germany Services Sector Remains in Contraction

Germany’s S&P Global Flash Services PMI for August 2026 was revised up to 49.7 from the preliminary estimate of 48.5, though it remained just below July’s four-month high of 49.8. The index signaled a fifth straight month of contraction in the services sector, yet there were tentative signs of improvement. New orders increased for a second consecutive month, supported in part by stronger foreign demand. New export business rose for the first time since February and at the fastest pace since May 2023.

These developments prompted firms to expand their workforce for the first time in eight months, with the rate of job creation the strongest since October of the previous year. On the cost side, input prices climbed at their fastest pace in three months. By contrast, output charge inflation eased slightly, though it remained comfortably above its long-run average. Business confidence dipped marginally from July’s five-month high, but service providers stayed optimistic about the outlook for activity over the coming year.