The decline in the German manufacturing industry eased in April
The decline in the German manufacturing sector, which accounts for more than a fifth of the German economy, eased in April.
The final data of the HCOB (Hamburg Commercial Bank) April 2024 manufacturing industry Purchasing Managers Index (PMI) prepared by S&P Global has been announced.
Accordingly, the manufacturing industry PMI in the country, which was 41.9 points in March, increased to 42.5 points in April. The expectation was that the index would be 42.2 points.
It was noteworthy that the manufacturing industry PMI in the country remained below the 50 point level, which indicates growth in activities.
Hamburg Commercial Bank Chief Economist Cyrus de la Rubia stated that goods stocks in Germany continue to be depleted without being replaced and said, “Those looking for encouraging signs from the manufacturing sector will be a little disappointed when analyzing the HCOB PMI figures for Germany.”
Stating that new orders for German goods continue to decline rapidly, Cyrus de la Rubia emphasized that this situation shows that structural factors have a significant reducing effect on the German economy.
The manufacturing sector accounts for more than a fifth of the German economy. The German manufacturing industry, which is dependent on exports, is negatively affected by the slowdown in the global economy, increasing Chinese competition and high energy prices after the Russia-Ukraine War.
The German economy shrank by 0.3 percent last year compared to the previous year due to unusually high inflation affecting purchasing power, high energy prices, falling investments, weak foreign demand and high interest rates.
The country’s economy did not enter a technical recession, growing above expectations with 0.2 percent in the first quarter of the year.
On April 24, the German government revised its official growth expectation, previously announced as 0.2 percent for 2024, to 0.3 percent, “with signs of slight cyclical improvement.”
The decline in Eurozone factory activity deepened
The decline in manufacturing activity across the Eurozone deepened in April as demand fell despite factories cutting prices.
Manufacturing PMI decreased by 0.4 points compared to the previous month and reached 45.7 points in April. It was noteworthy that the index remained below the 50 point level, which indicates growth in activities, for 22 months.