The HCOB Germany Services PMI fell to 47.1 in May 2025 from 49 in April, revised down from a preliminary estimate of 47.2. The reading signaled the sharpest contraction in services activity since November 2022, driven by weak demand and heightened uncertainty. New business declined for the ninth consecutive month, with foreign orders falling at their steepest pace since December 2023. Employment rose for the fifth month in a row, though at the slowest rate in the current hiring sequence. On the price front, cost pressures eased slightly, with input inflation ticking down but remaining above the historical average, mainly due to wage increases. Output price inflation also slowed to a seven-month low but stayed elevated compared to pre-pandemic levels. Despite a modest rebound in business confidence from April’s low, overall optimism remained muted amid ongoing geopolitical concerns.