German manufacturing downturn eases slightly - PMI

The downturn in Germany’s hard-pressed manufacturing sector eased marginally last month, a closely-watched survey showed on Thursday, although it remained in contraction.

The latest HCOB German manufacturing purchasing managers' index was 42.5, up from 41.9 in March and slightly ahead of the flash reading of 42.2.

The output index also strengthened, rising to 45.2 in April from 43.2 a month earlier, supported by an improving performance in the intermediate goods category.

However, with the readings still below the neutral 50.0 level, the sector remained in contraction. A reading above the neutral 50.0 indicates growth.

Overall inflows of new work also fell at a faster rate, while factory gate prices fell at the sharpest rate since 2009.

Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said: "Anyone looking for encouraging economic signals from the manufacturing sector will be somewhat frustrated.

"The headline index remains deep in recessionary territory, new orders are falling even faster than before and instead of restocking inventories of purchase goods, they continue to be depleted."

Looking to the rest of the year, however, he noted: "Overall, there is a possibility that the industry may return to growth territory in the second half of the year, primarily due to a somewhat brighter global economic environment."

The German economy, Europe’s largest, is heavily reliant on the manufacturing sector. It has been hit hard by surging energy costs, record inflation, higher interest rates and weaker global demand.

The eurozone PMI, also released on Thursday, fell to 45.7 in April from 46.1 a month previously.

Data for the HCOB Germany PMI were collected between 11 and 23 April. The survey was sent to purchasing managers at a panel of around 420 manufacturers.