Germany‘s manufacturing industry has reported its sharpest drop in export orders since December 2024, however the overall outlook for exports is improving, according to the HCOB Germany Manufacturing PMI Export Conditions Index published by Hamburg Commercial Bank and S&P Global.
The Germany Manufacturing PMI stood at 51.8 in November, up from 51.6 the previous month, which is the tenth consecutive monthly increase. The index is now at its highest level for a year and a half, however it still remains below the long-term average of 52.1.
While North America remains the fastest-growing global export region for German manufacturers, with an index reading of 52.6, growth has slowed to its weakest pace since June. Asia has also seen expansion in trade-weighted activity, albeit at the slowest rate since August.
European export conditions have remained ‘subdued’, at 51.4, the report noted, however the latest index reading was above the neutral 50.0 value for the fourth consecutive month, and currently stands at its highest level since May 2022. This has been supported by ‘renewed private sector growth’ in France, alongside ‘solid momentum’ in Italy and Spain.
New export orders
While export conditions have picked up, German manufacturers have reported a significant decline in new export orders, with the New Export Orders Index falling to 46.3 in November, down from 49.3 in October.
This means that the index has remained below the neutral 50 mark for the fourth consecutive month, with businesses citing headwinds from intense price competition, reduced investment spending by clients, and uncertainty linked to geopolitical and economic conditions.
Improved outlook
“Germany’s export conditions brightened a little further in November,” commented Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. “The main reason is that growth is showing up in key export destinations. What stands out, though, is that expansion in these regions remains rather sluggish, with PMI readings between 51.4 (Europe) and 52.6 (North America).
“On the positive side, momentum in Europe has picked up somewhat, which is important because most of Germany’s exports head there. Southern European countries like Italy, Spain, and Greece are playing a bigger role here.
“Export order intake does not reflect the slightly improved global economic backdrop. In fact, orders fell more sharply than in the previous month, driven mainly by weaker demand in the consumer goods sector. The chemical industry continues to suffer from declining foreign orders, while the machinery and automotive sectors saw more orders than last month. Overall, the export order situation remains unsatisfactory, leaving a key prerequisite for a sustainable industrial recovery unmet.” Read more here.
