Finance
Germany's manufacturing sector edges closer to growth in July, PMI shows
Published by Global Banking and Finance Review
Posted on August 1, 2025
2 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on August 1, 2025
2 min readLast updated: January 22, 2026
Germany's manufacturing sector shows recovery signs in July with PMI at 49.1. While domestic demand weakens, foreign demand and export sales remain strong.
BERLIN (Reuters) -The downturn in German manufacturing activity eased further in July as output grew for a fifth straight month, albeit at a significantly slower pace, a survey showed on Friday.
The HCOB final Purchasing Managers' Index (PMI) for German manufacturing, compiled by S&P Global, rose to 49.1 in July from 49.0 in June, slightly below a preliminary reading of 49.2.
That marks the highest reading in nearly three years, though it still remains slightly below the 50 level denoting growth.
Employment, stocks of purchases and supplier delivery times made positive contributions to the overall indicator, which helped to offset the slower rises in output and new orders.
Output rose for a fifth month in a row, although at the weakest pace since the current growth sequence began in March, mainly due to declines in consumer and intermediate goods.
However, Hamburg Commercial Bank economist Cyrus de la Rubia noted that production in capital goods has grown robustly.
"This suggests that domestic demand, which depends on private consumption, is somewhat weakening, while foreign demand - crucial for the capital goods industry - is performing better," said de la Rubia.
Export sales increased for the fourth month in a row in July, but growth moderated from June's 40-month high.
"While this was initially linked to front-loaded U.S. imports in the spring, the continued foreign demand into early summer suggests a more fundamental improvement in conditions."
The tariff agreement reached by the United States and European Union on Sunday may mean that U.S. importers will buy fewer goods from Germany in the near future, said the economist.
"At the same time, however, uncertainty is likely to settle at a lower level, which should support overall demand," he said.
(Reporting by Miranda Murray; Editing by Toby Chopra)
Economic growth refers to the increase in the production of goods and services in an economy over a period of time, typically measured by the rise in Gross Domestic Product (GDP).
Capital goods are assets used in the production of goods and services, such as machinery, buildings, and tools, which are essential for manufacturing processes.
Foreign demand refers to the desire of consumers and businesses in other countries to purchase goods and services produced in a different country.
Consumer goods are products that are purchased by individuals for personal use, such as clothing, food, and electronics.
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