FX.co ★ German Manufacturing Remains in Contraction

In October 2025, the HCOB Germany Manufacturing PMI slightly increased to 49.6, slightly above market predictions and just above September's 49.5. This points to an ongoing mild contraction within the sector. Production has continued to grow for the eighth month in a row, albeit at a reduced pace, bringing the output index to a three-month low. There was a slight uptick in new orders following a downturn in the prior month, yet backlogs have shown a continuous decline. Employment has seen its seventeenth consecutive monthly decrease, marking the sharpest reduction since June as manufacturers exercise caution due to persistent supply chain difficulties, most notably in semiconductors and machinery. Input costs have continued to decrease, though the rate of decline has slowed, while output prices have risen for only the second time in two and a half years. Business confidence has further diminished, burdened by concerns surrounding heightened costs, increased global competition, and ongoing uncertainty in the industrial landscape.