FX.co ★ Germany Manufacturing PMI Rises Less Than Expected

The HCOB Germany Manufacturing PMI reached 48.8 in May 2025, marginally up from 48.4 in April, achieving the highest level in nearly three years, albeit slightly short of the projected 48.9. This uptick was driven by output increases for the third consecutive month, bolstered by a surge in new export orders, particularly to the US and certain European regions. Notably, new export orders saw their most significant growth since early 2022, contributing to a near stabilization of work backlogs. Although the manufacturing sector continued to experience job losses, the pace of staff reductions decreased to its slowest rate since January 2024. On the pricing front, factory gate charges fell again following a temporary rise in April, and input cost deflation persisted, albeit more moderately. Moreover, business confidence soared to its highest point since February 2022, prompted by anticipated public spending increases, a rebound in European demand, and optimism regarding a potential US-EU trade agreement.