Economic Buzz: German manufacturing PMI at 49.0 in June
Goods producers' purchases of raw materials and other inputs meanwhile rose for the first time in three years as expectations towards future output improved. Factory employment, on the other hand, continued to fall, with the pace of job cuts even quickening slightly.
The discounting of prices remained a theme across the manufacturing sector, with latest data showing sustained declines in both input costs and factory gate charges amid reports of strong competitive pressures.
The headline HCOB Germany Manufacturing PMI came in at 49.0 in June, up from 48.3 in May and its highest reading since August 2022. Whilst both new orders and output rose on the month, the headline PMI was kept below the 50.0 no-change threshold by further reductions in both employment and stocks of purchases as well as an improvement in supplier delivery times (which imparts a negative influence due to an implied weakness in capacity pressures).
New orders rose for the third time in the past four months in June, after falling slightly in May. Faced with a rise in demand, German manufacturers scaled up production for the fourth time in as many months in June.
The sustained upturn in production requirements led goods producers in Germany to increase their purchasing activity for first time in three years in June, albeit only marginally.
Employment levels continued to be scaled back during June, stretching the current sequence of staff retrenchment to exactly two years. Latest data also indicated a lack of pressure on supply chains, as evidenced by quicker lead times for inputs.
Average prices paid by German manufacturers for inputs fell in June, continuing the trend seen every month for almost two-and-a-half years.
Lastly, June's survey indicated a slight improvement in manufacturers' growth expectations for the coming year.
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