Germany April final manufacturing PMI 48.4 vs 48.0 prelim

• Prior was 48.3

Key findings:

• HCOB Germany Manufacturing PMI at 32-month high.
• HCOB Germany Manufacturing PMI Output Index at 37-month high.
• Business expectations ease to weakest in four months.

Comment:

Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:

“With the headline PMI moving closer to the neutral 50 mark, one might think that German industry is gradually emerging from a downturn that has lasted almost three years. After all, manufacturers have expanded production for the second month in a row. It doesn't take a crystal ball to see that the road ahead will be bumpy, though. US tariffs and the associated uncertainty are going to weigh on German exporters. And it is quite possible that the expansion in production over the past two months is due to pull-forward effects in connection with the impending US tariff increases, which means that there might be a backlash in the coming months.

“Despite global headwinds, German manufacturers recorded a marginal increase in export orders for the first time in over three years. This supported a second straight monthly rise in overall order intakes. Orders from the German Bundeswehr are probably not yet playing a decisive role here, but many companies – defence contractors, but also vehicle and drone manufacturers and producers of optical equipment, for example – are likely to benefit from the planned additional defence spending in the future.

“Falling energy prices are helping German industry. The drop in oil and gas prices due to increased fears of recession in the US is reflected in lower purchase prices and is helping manufacturers to expand their profit margins. This is even more the case as sales prices rose slightly in April for the first time in nearly two years.”