German manufacturers see steady improvement in May export conditions

The headline Hamburg Commercial Bank (HCOB) Germany manufacturing PMI export conditions index posted 50.4 in May, up from 50.2 in April and above the neutral 50 threshold for the fourth consecutive month.

However, the latest reading was still weaker than the average since the index began in 2005 (52.2). There was a divergence between developed and emerging markets in May, with the former signalling the strongest upturn since August 2024 (index at 51).

In contrast, emerging markets business activity decreased for the first time since January. At 49.2 in May, down from 50.7 in April, the respective index was the lowest for eight months. This partly reflected a downturn in private sector output in China for the first time since December 2022.

The seasonally-adjusted new export orders index registered 51 in May, up from 50.3 in April and above the neutral 50 threshold for the second month in a row.

Although only indicative of a marginal upturn in new orders from abroad, the latest reading was the highest since February 2022, a release from S&P Global Ratings, which compiled the survey, said.

Improving export orders books across the German manufacturing sector contrasted with subdued global trade volumes in May. The worldwide measure of PMI new export orders posted 48, up slightly from 47.2 in April, but still inside contraction territory.

Three out of four broad categories within the German manufacturing sector recorded an expansion of new export order volumes in May.

Manufacturers in the chemicals sub-sector in the country recorded a marginal increase in new export sales during May. This was generally attributed to rising demand from clients in Asia and Europe, according to survey respondents.

ALCHEMPro News Desk (DS)