BERLIN, Jan 24 Reuters Business activity in Germany39;s private sector stabilised in January, marking an end to a sixmonth contraction as services growth offset a continued decline in manufacturing output, according to a survey published on Friday.

The HCOB German flash composite Purchasing Managers39; Index, compiled by SP Global, rose to 50.1 in January, up from 48.0 in December, reaching a sevenmonth high and crossing the 50.0 threshold that separates growth from contraction.

Analysts polled by Reuters had forecast a reading of 48.2.

The PMI offers some hope that Germany might dig itself out of the recessionary phase of the past two years, said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

Germany39;s economy contracted for the second consecutive year in 2024, highlighting the depth of the downturn gripping Europe39;s biggest economy.

The services sector showed resilience, with the business activity index for Germany39;s services sector climbing to 52.5 from 51.2, its highest in six months and above the 51.0 forecast by analysts polled by Reuters.

Although it remained in contraction territory, the manufacturing index improved to 44.1 from 42.5, beating expectations of a rise to 42.7.

Manufacturing output is shrinking at the slowest rate since mid2024, and the new order situation has eased a bit too, de la Rubia said.

Manufacturing faced significant pressure from international competition and customer hesitation amid economic and political…