Germany’s private sector demonstrated slight growth in April

The private sector of the German economy managed to grow in April, performing better than forecast after the US tariff announcement. 

The composite PMI from S&P Global decreased from 51.3 in March to 50.1 in April, versus the forecast of 49.7 points. The index remained just above the 50-point threshold that separates the growth of economic activity from its contraction. However, the index of business activity in the services sector fell to 49, indicating contraction for the first time since November 2024.

Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, believes that the new government of Friedrich Merz can give the economy a boost with its fiscal stimulus program. Companies are still hiring new employees, and job growth even accelerated for the second month in a row.

In general, activity in the eurozone was stronger than expected. The composite business activity index fell to 50.4 from 50.9, but remained in positive territory.