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Germany PMI June 2024

Germany: Manufacturing PMI falls in June

The HCOB Germany Manufacturing Purchasing Managers’ Index (PMI) fell to 43.5 in June from May’s value of 45.4. As a result, the index moved further below the 50.0 no-change threshold, and signaled a faster deterioration in manufacturing-sector operating conditions compared to the previous month.

The latest reading reflected a sharper contraction in production due to deteriorating performances across all main industrial groupings. Similarly, new orders fell at a steeper pace, attributed to weakness in domestic demand and less new work from other European markets and China. More positively, employment declined at a slightly slower pace.

On the price front, while demand weakness continued to weigh on both input costs and output charges, both fell at a slightly softer pace. Lastly, business sentiment edged above the series’ pre-pandemic average and reached the highest level since February 2022, fueled by hopes of a pickup in exports and a general improvement in economic conditions.

Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, commented:

“Weak export orders for German companies, even as the global manufacturing sector shows a moderate recovery, is concerning. One likely explanation is the increasing competition from China, which is ramping up its exports worldwide due to sluggish domestic demand. This situation creates a double whammy for German exporters: fewer exports to China, evidenced by a 14% decrease in May, and heightened competition from Chinese products, especially in emerging markets.”

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