Germany's manufacturing activity at 32-month high in April

By Mucahithan Avcioglu

ISTANBUL (AA) - The HCOB Germany Manufacturing Purchasing Managers’ Index (PMI) rose to 48.4 in April, the highest figure in 32 months, according to a report by S&P Global on Friday.

Despite rising from 48.3 in the prior month, German manufacturing activity continued contracting in April, as a reading above the 50.0 no-change threshold level indicates growth, while anything below that signifies a contraction.

The figure exceeded the market forecasts of 48.0 points in April.

German manufacturing production levels rose at the quickest rate in more than three years in April, supported by an upturn in export orders.

"Goods producers were less optimistic about the outlook, however, and they continued to reduce workforce numbers, albeit at a slower pace," it said.

After declining steadily for over two years, production levels in the German manufacturing sector increased for a second consecutive month in April.

Supported by a more robust rise in the investment goods sector, the growth rate accelerated to its strongest since March 2022.

The new orders also saw back-to-back rises in April, though at a slower pace of growth.

"The latest decline in employment coincided with a notable deterioration in manufacturers' growth expectations for the year ahead. The degree of optimism towards future output retreated sharply from March's 37-month high to the lowest seen so far this year," it noted.

On the price front, input costs saw a sharp and accelerated decline, while average prices charged by German manufacturers rose for the first time in almost two years.

Cyrus de la Rubia, chief economist at the Hamburg Commercial Bank, said: "US tariffs and the associated uncertainty are going to weigh on German exporters. And it is quite possible that the expansion in production over the past two months is due to pull-forward effects in connection with the impending US tariff increases, which means that there might be a backlash in the coming months.”

He added: "Despite global headwinds, German manufacturers recorded a marginal increase in export orders for the first time in over three years. This supported a second straight monthly rise in overall order intakes.”