- Prior was 48.4
Key findings:
- HCOB Germany Manufacturing PMI at 2-month low.
- HCOB Germany Manufacturing PMI Output Index at 3-month low.
- Renewed decline in output prices amid falling input costs
Comment:
Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:
“Most people have got so used to gloomy headlines from the industrial sector that the good news often slips under the radar.
That is why it is worth looking beyond the headline PMI figure, which dipped slightly and is still in contraction territory. The
broader picture actually shows some encouraging signs. Production has now increased for the third month in a row, and
foreign orders have been on the rise for two straight months.
“What’s more, the uptick in output is not limited to just one area
– it is showing up across the board, in capital goods, intermediate goods and consumer goods. That is a solid sign of broad-
based improvement. It is also positive that companies have barely scaled back their purchases of intermediate goods, after
falls in each month since mid-2022. Most striking is perhaps that business sentiment is the most optimistic since February
2022. That likely has a lot to do with the formation of a new government, the promise of tax breaks for investment, a big
infrastructure package, and plans to boost defence spending.
“Some of the recent production increase may be tied to US importers rushing to get ahead of potential new tariffs. But other
factors, like expected interest rate cuts, lower energy prices, and a cyclical rebound after a downturn lasting more than two
years, are probably helping too. There is a decent chance this momentum will carry on, even if things slow down a bit.
“Manufacturing workforce numbers have been falling continuously since mid-2023. With a certain delay, this has led to
higher labour productivity in manufacturing, which PMI data show has been rising again since late 2024. It is likely to take a
few months before a possible recovery in the manufacturing sector is reflected in higher employment levels
