The export environment for German firms is “still pretty tough”, a leading analyst at Hamburg Commercial Bank has said, after the HCOB Germany Manufacturing PMI Export Conditions Index showed a slight increase in February.
The index, a key indicator of global macroeconomic conditions for German manufacturers, stood at 50.3 in February, up from 50.0 in January, While this is the first expansion of the index since November 2024, it still falls below the long-term average of 52.2, as Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, noted.
‘Barely budged’
“The HCOB PMI Export Index barely budged in February, hinting at only a slight improvement in Germany’s key export markets. Asian countries are doing alright, but the rest of Europe is still slowing down. Over in the US, which is a big deal for German exporters (10% of goods exports), things have slowed down for the second month in a row,” he commented. “With the threat of US tariffs, demand could drop significantly in the near future.”
Germany’s manufacturing sector reported a decline in new export orders, the data showed, although the rate of contraction eased for the third month in a row. The HCOB Germany Manufacturing PMI New Export Orders Index stood at 48.9 for the month, up from 46.5 in January.
Subdued demand
Businesses cited ‘subdued’ demand conditions in major export markets, particularly in developed economies, with geopolitical uncertainties and global trade tensions still weighing on export demand, despite some positive signs from customer restocking and anticipatory purchases ahead of potential tariff-related disruptions.
“There are some signs of stabilisation in export orders for German companies,” de la Rubia added. “The PMI has gone up for the third month in a row, indicating only a slight decline in export orders now. It’s interesting to note that the PMI in the automotive sector, which hit its lowest level since 2020 in October, has been rising steadily since then.
“If this trend keeps up, export orders might bounce back in six months after a dry spell since 2021. But with all the uncertainties in trade policy and beyond, it’s best not to rely too much on these trends.” Read more here.
