The S&P Global Germany Composite PMI edged up to 48.6 in May 2026 from 48.4 in April, compared to forecasts of 48.4, preliminary estimates showed. The reading pointed to a second straight month of contraction in private sector activity, amid a backdrop of weakening demand and elevated inflationary pressures. The downturn continued to be led by the service sector (47.8 vs 46.9), although there was a stalling of the manufacturing sector (49.9 vs 51.4) as factory orders fell back into decline. Input cost inflation rose to the quickest for three and-a-half years, mainly due to commodities and transportation cost, reflecting the disruption from the effective closure of the Strait of Hormuz. Meanwhile, output inflation slowed, suggesting businesses shouldering a greater proportion of the burden and hinting at an increased squeeze on company margins. Also, the pace of job losses gathered pace, despite business expectations showing a partial rebound from April's low.