Germany's Services PMI Slightly Rises
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 45 minutes ago
0mins
Source: seekingalpha
- Services PMI Increase: Germany's Services PMI rose to 48.60 in June from 48.10 in May, surpassing estimates of 46.8, indicating a slight improvement in the service sector despite ongoing economic challenges.
- Composite PMI Improvement: The Composite PMI also increased to 49.50 in June from 48.80 in May, exceeding market expectations of 48, suggesting a marginal recovery in overall economic activity, although it remains in contraction territory.
- Economic Challenges Persist: Despite the PMI uptick, economist Phil Smith noted that the service sector continues to face pressures from the economic backdrop of the Middle East conflict, with lower market confidence, rising prices, and tighter financial conditions impacting demand.
- Weak Quarterly Performance: The pace of contraction in services activity in June was the slowest since the downturn began in April, yet the headline index indicates the sector's worst quarterly performance in three and a half years, highlighting the fragility of the economic recovery.
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About GF
The New Germany Fund, Inc. (the Fund) is a diversified, closed-end management investment company. The Fund seeks long-term capital appreciation primarily through investment in middle-market German equities. The focus of the Fund's investments lies within Germany. Under normal market conditions at least 80% of the Fund’s net assets are invested in equity or equity-linked securities. The Fund invests in range of sectors, which include aerospace and defense; auto components; automobiles; banks; building products; chemicals; electrical equipment; independent power and renewable electricity producers; insurance; Internet and direct marketing retail; information technology (IT) services, life sciences tools and services; metals and mining; real estate management and development; software; textiles, apparel and luxury goods; trading companies and distributors; diversified financial services; commercial services and supplies, and others. The Fund's investment advisor is DWS International GmbH.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
New Germany Fund Announces Annual Meeting Results
- Board Election Results: At the Annual Meeting of Stockholders held on June 30, 2026, Bernhard Koepp was elected as Class II Director for a three-year term, ensuring continuity and stability in corporate governance.
- Auditor Appointment Confirmation: Stockholders ratified the appointment of Ernst & Young LLP as the independent auditors for the 2026 fiscal year, enhancing investor confidence in the fund's financial transparency and compliance.
- Investment Risk Advisory: The fund primarily focuses its investments in Germany, exposing it to risks such as currency fluctuations and political-economic changes, highlighting the volatility associated with concentrated investments in specific markets or regions, urging investors to carefully assess potential risks.
- Market Volatility Factors: Events such as war, terrorism, and economic uncertainty may lead to increased market volatility, affecting the fund and its investments, prompting investors to monitor external environmental changes that could impact their investments.
See More
Germany's Services PMI Slightly Rises
- Services PMI Increase: Germany's Services PMI rose to 48.60 in June from 48.10 in May, surpassing estimates of 46.8, indicating a slight improvement in the service sector despite ongoing economic challenges.
- Composite PMI Improvement: The Composite PMI also increased to 49.50 in June from 48.80 in May, exceeding market expectations of 48, suggesting a marginal recovery in overall economic activity, although it remains in contraction territory.
- Economic Challenges Persist: Despite the PMI uptick, economist Phil Smith noted that the service sector continues to face pressures from the economic backdrop of the Middle East conflict, with lower market confidence, rising prices, and tighter financial conditions impacting demand.
- Weak Quarterly Performance: The pace of contraction in services activity in June was the slowest since the downturn began in April, yet the headline index indicates the sector's worst quarterly performance in three and a half years, highlighting the fragility of the economic recovery.
See More
Pound Climbs to Two-Week High as European Markets Rally
- Pound Performance: The pound rose to $1.33 against the dollar, reaching a two-week high as investors embraced riskier assets amid signs of progress in indirect U.S.-Iran talks, indicating a shift in market sentiment towards risk-taking.
- European Market Gains: The German DAX index increased by 0.33%, marking its third consecutive day of gains, reflecting investor confidence in economic recovery, while the French CAC index rose by 0.63%, showcasing overall positive market sentiment.
- French Budget Deficit: France's budget deficit narrowed to €93.3 billion from €94 billion in the January-May 2026 period, indicating an improvement in government fiscal health that may provide more room for future economic policies.
- Spanish Unemployment: Spain's registered unemployment fell by 28,739 to 2.291 million in June 2026, demonstrating signs of recovery in the labor market, which could further drive consumption and economic growth.
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Analysis of European Manufacturing PMI Data
- UK Manufacturing Performance: The S&P Global UK Manufacturing PMI for June stands at 52.5, down from May's four-year high, indicating signs of economic slowdown that could impact investor confidence and market activity.
- Modest Improvement in Germany: Germany's manufacturing PMI shows slight improvement in June, although specific figures are not disclosed, this trend may suggest initial signs of economic recovery, potentially attracting more investments.
- France Manufacturing Beats Expectations: France's manufacturing PMI rose to 51.2 in June, exceeding market forecasts, indicating relatively strong performance in the manufacturing sector, which could boost domestic consumption and investment.
- Eurozone Overall Slowdown: The Eurozone manufacturing PMI fell to a four-month low of 51.4, reflecting overall sluggish economic growth, which may lead policymakers to consider additional stimulus measures to support the economy.
See More
Germany's Manufacturing PMI Slightly Rises to 50.3
- PMI Data Increase: Germany's Manufacturing PMI rose to 50.3 in June from 50.1 in May, indicating a slight improvement in economic activity, although it remains just above the 50.0 threshold separating expansion from contraction.
- Modest Production Growth: The sector ended the second quarter with a modest rise in production volumes, with firms partly relying on backlogged orders to sustain output, a reliance that is not sustainable in the long run and may impact future growth.
- New Orders Recovery: New orders returned to growth in June, albeit only marginally, indicating a preliminary recovery in market demand that could support future production.
- Ongoing Growth Risks: Despite the recovery in orders, high price levels and elevated uncertainty continue to pose risks to growth in the near term, potentially affecting companies' production decisions.
See More
EU Imposes €3 Customs Fee on Low-Value E-Commerce Imports
- New Tariff Policy: The EU has implemented a €3 customs fee on low-value e-commerce imports from outside the bloc starting July 1, which is expected to increase costs for consumers shopping on Chinese online marketplaces like Shein, Temu, and AliExpress, thereby impacting cross-border e-commerce consumption patterns.
- Temporary Measure: This €3 charge is a temporary measure that will be replaced by category-specific duties on July 1, 2028, when the new EU Customs Authority is set to begin operations, which will have profound implications for future import policies.
- Market Competition Impact: EU policymakers argue that the previous exemption for goods under €150 was exploited by ultra-low-cost retailers, leading to unfair competition for local businesses and affecting the healthy development of the market.
- Consumer Safety Risks: According to recent EU research, 60% of products purchased online from outside the bloc failed to comply with EU regulations, with 65% of imported cosmetics and toys not meeting standards, indicating potential consumer safety risks that may prompt stricter regulatory measures.
See More
New Germany Fund Announces Annual Meeting Results
- Board Election Results: At the Annual Meeting of Stockholders held on June 30, 2026, Bernhard Koepp was elected as Class II Director for a three-year term, ensuring continuity and stability in corporate governance.
- Auditor Appointment Confirmation: Stockholders ratified the appointment of Ernst & Young LLP as the independent auditors for the 2026 fiscal year, enhancing investor confidence in the fund's financial transparency and compliance.
- Investment Risk Advisory: The fund primarily focuses its investments in Germany, exposing it to risks such as currency fluctuations and political-economic changes, highlighting the volatility associated with concentrated investments in specific markets or regions, urging investors to carefully assess potential risks.
- Market Volatility Factors: Events such as war, terrorism, and economic uncertainty may lead to increased market volatility, affecting the fund and its investments, prompting investors to monitor external environmental changes that could impact their investments.
See More
Germany's Services PMI Slightly Rises
- Services PMI Increase: Germany's Services PMI rose to 48.60 in June from 48.10 in May, surpassing estimates of 46.8, indicating a slight improvement in the service sector despite ongoing economic challenges.
- Composite PMI Improvement: The Composite PMI also increased to 49.50 in June from 48.80 in May, exceeding market expectations of 48, suggesting a marginal recovery in overall economic activity, although it remains in contraction territory.
- Economic Challenges Persist: Despite the PMI uptick, economist Phil Smith noted that the service sector continues to face pressures from the economic backdrop of the Middle East conflict, with lower market confidence, rising prices, and tighter financial conditions impacting demand.
- Weak Quarterly Performance: The pace of contraction in services activity in June was the slowest since the downturn began in April, yet the headline index indicates the sector's worst quarterly performance in three and a half years, highlighting the fragility of the economic recovery.
See More
Pound Climbs to Two-Week High as European Markets Rally
- Pound Performance: The pound rose to $1.33 against the dollar, reaching a two-week high as investors embraced riskier assets amid signs of progress in indirect U.S.-Iran talks, indicating a shift in market sentiment towards risk-taking.
- European Market Gains: The German DAX index increased by 0.33%, marking its third consecutive day of gains, reflecting investor confidence in economic recovery, while the French CAC index rose by 0.63%, showcasing overall positive market sentiment.
- French Budget Deficit: France's budget deficit narrowed to €93.3 billion from €94 billion in the January-May 2026 period, indicating an improvement in government fiscal health that may provide more room for future economic policies.
- Spanish Unemployment: Spain's registered unemployment fell by 28,739 to 2.291 million in June 2026, demonstrating signs of recovery in the labor market, which could further drive consumption and economic growth.
See More
Analysis of European Manufacturing PMI Data
- UK Manufacturing Performance: The S&P Global UK Manufacturing PMI for June stands at 52.5, down from May's four-year high, indicating signs of economic slowdown that could impact investor confidence and market activity.
- Modest Improvement in Germany: Germany's manufacturing PMI shows slight improvement in June, although specific figures are not disclosed, this trend may suggest initial signs of economic recovery, potentially attracting more investments.
- France Manufacturing Beats Expectations: France's manufacturing PMI rose to 51.2 in June, exceeding market forecasts, indicating relatively strong performance in the manufacturing sector, which could boost domestic consumption and investment.
- Eurozone Overall Slowdown: The Eurozone manufacturing PMI fell to a four-month low of 51.4, reflecting overall sluggish economic growth, which may lead policymakers to consider additional stimulus measures to support the economy.
See More
Germany's Manufacturing PMI Slightly Rises to 50.3
- PMI Data Increase: Germany's Manufacturing PMI rose to 50.3 in June from 50.1 in May, indicating a slight improvement in economic activity, although it remains just above the 50.0 threshold separating expansion from contraction.
- Modest Production Growth: The sector ended the second quarter with a modest rise in production volumes, with firms partly relying on backlogged orders to sustain output, a reliance that is not sustainable in the long run and may impact future growth.
- New Orders Recovery: New orders returned to growth in June, albeit only marginally, indicating a preliminary recovery in market demand that could support future production.
- Ongoing Growth Risks: Despite the recovery in orders, high price levels and elevated uncertainty continue to pose risks to growth in the near term, potentially affecting companies' production decisions.
See More
EU Imposes €3 Customs Fee on Low-Value E-Commerce Imports
- New Tariff Policy: The EU has implemented a €3 customs fee on low-value e-commerce imports from outside the bloc starting July 1, which is expected to increase costs for consumers shopping on Chinese online marketplaces like Shein, Temu, and AliExpress, thereby impacting cross-border e-commerce consumption patterns.
- Temporary Measure: This €3 charge is a temporary measure that will be replaced by category-specific duties on July 1, 2028, when the new EU Customs Authority is set to begin operations, which will have profound implications for future import policies.
- Market Competition Impact: EU policymakers argue that the previous exemption for goods under €150 was exploited by ultra-low-cost retailers, leading to unfair competition for local businesses and affecting the healthy development of the market.
- Consumer Safety Risks: According to recent EU research, 60% of products purchased online from outside the bloc failed to comply with EU regulations, with 65% of imported cosmetics and toys not meeting standards, indicating potential consumer safety risks that may prompt stricter regulatory measures.
See More
