Germany’s S&P Global Composite PMI fell to 51.9 in March 2026, down from 53.2 in February, marking the weakest private-sector expansion this year. The ongoing Middle East conflict has dampened growth in the service sector, while manufacturing output surged to a 49-month high, driven by supply chain disruptions that paradoxically boosted factory activity. New business remained largely stable, as declining service demand was offset by a rise in factory orders. However, employment declined across sectors, and business confidence for the year ahead weakened. Cost inflation increased, particularly in manufacturing, though average output prices rose at only a slightly faster rate.