Economic Buzz: German manufacturing PMI signals growth but outlook weakens on rising risks

Germany?s manufacturing sector continued to expand in April, with the S&P Global Germany Manufacturing PMI at 51.4, slightly down from March?s 52.2 but still above the 50 mark that signals growth. Output and new orders increased for another month, supported partly by customers placing orders early to avoid rising prices and potential supply shortages. However, the pace of growth slowed as high prices and uncertainty began to weigh on demand.

Concerns about the impact of the Middle East war have weakened business confidence. For the first time in 18 months, more manufacturers expect production to decline over the coming year than to increase. Input costs rose sharply, recording the fastest increase in over three-and-a-half years and reaching the highest level since September 2022. This led to the steepest rise in factory prices since January 2023.

Supply chain pressures also intensified, with delivery delays worsening to levels last seen in mid-2022. Firms increased purchasing activity to manage future risks, though growth remained modest. Inventories continued to decline, and employment fell further, even as companies managed to keep workloads stable.

Powered by Commodity Insights