Germany’s Manufacturing Sector Shows Signs of Stabilization Amid Continued Contraction

The decline in Germany’s manufacturing sector moderated in October, with the HCOB Germany Manufacturing PMI edging up to 43.0 from September’s 40.6, marking a three-month high. However, this index, compiled by S&P Global, remains well below the neutral 50-point level, signaling ongoing contraction.

Key Points from October PMI Data

• Output and New Orders: Both declined at a slower rate than in September, suggesting a potential easing in the downturn.
• Employment: Job cuts continued, though the pace slowed only slightly from September’s four-year peak.
• Export Sales: While still historically low, the decline in export sales reached its slowest rate in five months, hinting at potential stabilization.

Industry Sentiment and Outlook

Business confidence, though still subdued, saw a minor increase as manufacturers grapple with political and economic uncertainties, especially within the automotive and construction sectors. Survey contributor Feldhusen noted that the less pronounced drop in new orders could indicate a stabilizing trend in the coming months.