Germany's manufacturing sector showed signs of stabilization in January 2025, with the HCOB Manufacturing PMI reaching 45.0, exceeding preliminary forecasts of 44.1 and improving from December's 42.5.
German factory decline slows
While still in contraction territory (below 50), the pace of decline eased, with output and new orders falling at the slowest rate in eight months. Despite improved business sentiment, companies continued to reduce their workforce due to excess capacity, extending the trend of job cuts to 19 months. Weak demand limited pricing power, although discounting decreased. Input costs were relatively stable, with suppliers offering better terms.
Optimism grows for German manufacturing exports
Although export sales declined, manufacturers are increasingly optimistic, anticipating lower interest rates and an economic rebound after the election.
