• Prior 57.4
  • Services PMI 52.2 vs 48.0 expected
  • Prior 48.7
  • Composite PMI 54.3 vs 49.4 expected
  • Prior 49.9

That's a modest rebound in activity as the German economy displays some notable resilience to start the new year. The headline reading is a five-month high with the composite reading also bouncing to its highest in four months.

This comes as there were tentative signs of supply chain disruptions easing. That said, price pressures remain elevated with input cost and output charge inflation holding close to record highs in the survey. Markit notes that:

“January’s flash PMI numbers came in comfortably above consensus to show a surprisingly resilient performance from the German economy at the start of the year, buoyed in particular by strong factory output growth.

“Manufacturing is expected to stage a recovery in 2022 as supply bottlenecks ease, but seeing growth of this speed already is a welcome development. The drag on production from supply-chain issues looks to have eased further, although there is still a lot of room for improvement on this front.

“January’s services numbers, showing activity recovering slightly after the decline at the end of last year, were another positive surprise, and are perhaps evidence that German businesses and consumers alike are learning to cope with COVID and any associated restrictions. All in all, the data mark a positive start to the year and go some way to allaying fears about Omicron’s impact on the German economy in the first quarter.

“Still, rising costs remain a concern for businesses, with the survey data showing that input prices are continuing to rise sharply and on multiple fronts.”