Germany's manufacturing PMI rises to 42.6 but remains in contraction

The HCOB Flash Germany Manufacturing PMI rose to 42.6 in October 2024, up from 40.6 in September, the lowest level in nearly a year, and exceeded expectations of 40.8.

Germany's manufacturing PMI rises to 42.6 but remains in contraction

Despite this improvement, the PMI still indicates a significant contraction in the manufacturing sector. Reports suggest that customers are holding back on spending due to increased economic uncertainty and weak automotive industry demand. New business inflows experienced a sharp decline, and factory gate charges saw their most significant drop in over 15 years. Additionally, manufacturers encountered another considerable decrease in purchase prices due to competitive pressures. Sentiment remained negative, showing little change from September's 11-month low.

Caution advised as manufacturing recession expected to continue, says economist

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, noted, "Manufacturing will likely remain in recession during the fourth quarter, but it may begin next year on a more vital note; however, this assessment should be approached with caution given it is based on just one month's improvement.