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Disappointing details behind disappointing manufacturing PMI

GERMAN DATA
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  • The German manufacturing PMI was a poor print - and there was little in the details of the data to redeem it from the downward surprise for the headline. New orders, manufacturing confidence, domestic demand and export orders all deteriorated. As with France, there are limited supply chain issues from the Red Sea. And employment is still holding up.
  • The manufacturing print fell to a 4-month low (remember it had been sub-40 in mid-2023).
  • The services side was broadly in line with expectations with confidence picking up.
  • "New business in the German private sector declined at the quickest pace for four months in February. Reports from surveyed firms highlighted general reluctance among customers amid economic uncertainty and tight financial conditions. New orders fell across both monitored sectors, but particularly sharply in manufacturing where the rate of contraction accelerated markedly from the previous month to the fastest since last November. There was a further broad-based decrease in new export business. "
  • "Driven by a further strengthening of service sector optimism, overall business expectations improved to a ten-month high in February. The result did, however, mask a deterioration in manufacturing sentiment, which turned pessimistic for the first time since last November and kept overall business confidence still below its long-run trend."
  • "February data meanwhile showed the fastest increase in business costs for ten months, driven in part by strong wagepressures in the service sector. Prices continued falling in manufacturing, however, where weaker demand more than offsethigher transport costs."
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  • The German manufacturing PMI was a poor print - and there was little in the details of the data to redeem it from the downward surprise for the headline. New orders, manufacturing confidence, domestic demand and export orders all deteriorated. As with France, there are limited supply chain issues from the Red Sea. And employment is still holding up.
  • The manufacturing print fell to a 4-month low (remember it had been sub-40 in mid-2023).
  • The services side was broadly in line with expectations with confidence picking up.
  • "New business in the German private sector declined at the quickest pace for four months in February. Reports from surveyed firms highlighted general reluctance among customers amid economic uncertainty and tight financial conditions. New orders fell across both monitored sectors, but particularly sharply in manufacturing where the rate of contraction accelerated markedly from the previous month to the fastest since last November. There was a further broad-based decrease in new export business. "
  • "Driven by a further strengthening of service sector optimism, overall business expectations improved to a ten-month high in February. The result did, however, mask a deterioration in manufacturing sentiment, which turned pessimistic for the first time since last November and kept overall business confidence still below its long-run trend."
  • "February data meanwhile showed the fastest increase in business costs for ten months, driven in part by strong wagepressures in the service sector. Prices continued falling in manufacturing, however, where weaker demand more than offsethigher transport costs."