The German manufacturing sector ended 2024 in contraction, with a further decline in production and new orders in December, shows the final S&P Global/HCOB PMI published on Thursday.
The PMI index reached 42.5 in December, in line with its preliminary reading and after 43.0 in October and November.
The 50 mark separates growth and contraction in activity.
“The situation in the manufacturing sector remains quite degraded,” notes Cyrus de la Rubia, chief economist at the Hamburg Commercial Bank.
“Production is in sharp decline and new orders continue to collapse, which clearly shows that the industry will not emerge from recession anytime soon,” underlines the economist.
The intermediate goods segment notably posted its biggest decline in a year, and “things do not look much more encouraging for the capital goods sector,” adds Cyrus de la Rubia.
Manufacturing employment fell for the 18th straight month as businesses adjusted to weaker demand, although the pace of job losses slowed to its lowest since August.
According to the survey, despite the improvement in delivery times of inputs and the continued decline in their prices, manufacturers' growth forecasts remain moderate due to political uncertainty and difficulties encountered in the construction and construction sectors. the automobile.
The trend of economic deterioration could end in the second half of 2025, estimates Cyrus de la Rubia, with Germany then having a new government, which would encourage businesses to invest and households to consume.
“But it is difficult to find confirmation of this thesis in the figures. The index of future production is just above 50, which suggests that companies expect their production in a year to be a little more important than today,” warns Cyrus de la Rubia.
(Written by Miranda Murray; French version Corentin Chappron, edited by Blandine Hénault)
