Berlin (Reuters) – Activity in the German manufacturing sector has improved in June and new orders have increased at their fastest rate for more than three years, carried by a growing demand both at national and international level, show the final results of the S&P Global/HCOB survey published on Tuesday.
The final index in the manufacturing sector has emerged at 49.0 in June, its highest level since August 2022, and complies with the “flash” estimate given last month and the expectations of economists interviewed by Reuters. He established himself in May at 48.3.
However, it remains below the threshold of 50 separating growth and contraction of the activity.
New orders have increased for the third time in four months, export orders being particularly strong, stimulated by the demand of China, Europe and the United States.
For Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, this increase in new orders is “encouraging” because it does not only translate an anticipation of American importers upstream of the recovery of customs duties but also signs of a recovery in domestic demand.
The acceleration of the pace of job cuts in the sector, however, questions the vigor of this recovery, he noted.
Employment in the sector continued to decrease, recording the most important withdrawal in four months, which, combined with the reduction of purchasing stocks, maintained the PMI index in the contraction territory.
The drop in staff, which has now lasted for two years, reflects a reduced use of capacities and efforts to increase productivity, specifies the survey.
The prospects of companies have improved, reaching their highest level since February 2022, optimism being linked in particular to investment projects of the German government.
“The signs of a recovery, even if it is a little slow, multiply,” said Cyrus de la Rubia.
“Overall, the overall PMI index is on the rise and is about to cross a phase of expansion,” he added.
(Written by Miranda Murray; Claude Chendjou, edited by Augustin Turpin)
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