Export conditions in Germany have hit a 17-month high, according to the latest Headline HCOB Germany PMI Export Conditions Index, produced by S&P Global.
The index rose from 51.3 in September to 51.6 in October, remaining above the ‘neutral’ value of 50.0 for the ninth successive month.
While the increase was modest, S&P Global said, October’s reading was the strongest since May 2024.
North America was the best-performing region for German exports in October, with business activity expanding at its fastest pace for three months, while Asia also increased a a moderate pace, although the rate of growth eased slightly compared to September.
While Europe expanded at a slower pace than North America and Asia, the seasonally-adjusted index rose from 50.6 to 50.9, marking the strongest pace of improvement since May 2022.
This was boosted by ‘accelerated upturns’ in private sector output in the UK, Italy, Spain and Ireland, although a faster economic downturn in France was a ‘key headwind’ to manufacturing export conditions.
‘Recovery at a snail’s pace’
“This looks like a recovery at a snail’s pace,” commented Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. “Conditions for German exporters have improved again, and the index has been at or above the threshold value of 50 for 13 months in a row. However, at 51.6 points, there is still no sign of momentum building that would indicate a sustained and significant upturn in demand conditions for foreign demand.
“In particular, the situation in Europe remains weak, which is also due to the difficult political conditions in Germany’s most important European trading partner, France. The greatest momentum is to be found in the US, but it is precisely there that the government has erected tariff barriers, with the result that the higher demand from there is not reaching Germany at all or only partially. Asia also remains a difficult market. On the one hand, growth there is also sluggish, and on the other hand, Chinese companies in China and on third markets are in fierce competition with German companies.”
de la Rubia noted that while order intake in the chemical industry is “falling sharply”, consumer goods and mechanical engineering are seeing an uptick in orders.
“The automotive sector also appears to be on the upswing again, if we disregard the outlier in August,” he added. “The official export figures for September show that the important export markets of the US and China remain a burden, and against this backdrop, we expect only a moderate recovery in order intake, but no vigorous increase in demand.” Read more here.
