Manufacturing Contraction Slows
Manufacturing continued to weigh on Germany’s economic performance, but the Manufacturing PMI Output Index climbed to 48.5, up from 46.3 in January. The Flash Manufacturing PMI also reached 46.1, its highest level in 24 months, signaling a potential shift towards stabilization. This improvement marked the slowest rate of contraction in nine months, driven by a reduced fall in new orders, including export demand. However, challenges remain as potential U.S. tariffs could impact the sector in the coming months.
Price Pressures and Inflation Trends
Input cost inflation showed signs of easing, with overall rates ticking down from January’s highs. The service sector maintained its pricing power despite rising labor costs, while manufacturing saw a quicker drop in purchase prices. Output price inflation remained above the long-run average, underscoring…
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