Germany June final manufacturing PMI 49.0 vs 49.0 prelim | Forexlive

Key findings:

• Business expectations highest since February 2022

Comment:

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

“Signs of a recovery, albeit a somewhat sluggish one, are increasing. Production rose for the fourth month in a row,
especially in the capital goods sector in June, and order intakes have also picked up recently. The strength of the recovery is
somewhat called into question by the accelerated pace of job cuts and the steeper reduction in inventories of raw materials
and intermediate goods. The latter, however, may be the result of companies underestimating demand and therefore having
to draw more than usual on existing stocks of inputs for production. Overall, the headline PMI is pointing upward and is on
the verge of crossing into expansion territory.

“It is encouraging that new orders have risen three times in the past four months. In June, impulses came from both abroad
and domestically. It is therefore not only the pull-forward effects of US importers seeking to pre-empt higher tariffs that are
providing some tailwinds for German industry, but also domestic demand, which is gradually showing signs of life again.

“Purchasing prices have been falling month after month for around two-and-a-half years. However, competition has ensured
that customers of German manufacturers have also been benefiting from lower prices for most of the past two years. The
discounting appears to be somewhat less pronounced in sales prices, however, which suggests that profit margins in
industry have risen.

“The manufacturing sector is looking to the future with a great deal of confidence. While the mood in autumn last year was
very subdued, a large number of companies now consider it likely that production will increase over the next twelve months.
There is clearly some hope here that the new government will soon deliver on its promises to stimulate the economy.”