Germany’s manufacturing sector has ended 2025 on a weaker observe, with enterprise situations deteriorating additional in December, in keeping with the newest HCOB PMI survey. The headline Manufacturing PMI fell to 47 in December from 48.2 in November, marking a ten-month low.
Germany’s manufacturing sector weakened additional in December, with the HCOB PMI falling to a ten-month low of 47.
New and export orders fell sharply, prompting deeper cuts to jobs, buying and inventories.
Input prices rose unexpectedly, whereas promoting costs fell.
Optimism improved on hopes of improvement spending in 2026.
Production declined for the primary time in ten months. The setback was pushed by a renewed and sharper fall in new orders, which recorded their steepest contraction since January 2025. Manufacturers cited difficulties in securing contemporary enterprise each domestically and abroad.
Export demand remained a serious drag. Foreign orders fell for a fifth consecutive month, with the tempo of decline accelerating to its quickest since December 2024, reflecting weak world demand and ongoing commerce frictions, S&P Global stated in a launch.
In response, German items producers intensified cost-cutting measures. Employment fell on the sharpest fee in six months, whereas buying exercise contracted on the quickest tempo in almost a yr. Stocks of inputs had been run down aggressively, posting their steepest decline since early 2025, as companies adjusted output to softer order books.
Despite decrease enter demand, supply-side pressures elevated. Supplier supply instances lengthened for a fourth straight month, marking probably the most pronounced deterioration since September 2022. Survey respondents pointed to lowered provider capability and trade-related disruptions.
Input prices rose for the primary time in virtually three years. However, intense competitors prevented producers from passing these prices on, resulting in an extra, albeit modest, discount in manufacturing facility gate costs.
“In December, industry was affected not only by weak demand and falling sales prices, but also by rising input prices, which came as a surprise. Over the past few months, these prices had shown signs of stabilising, but an increase is something that has not happened for almost three years. Inventories of purchased goods have fallen at an accelerated pace over the past three months,” stated Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
On a extra constructive observe, enterprise sentiment improved. Output expectations rose for a second consecutive month to their highest stage since June, supported by hopes of demand from new product launches and elevated defence and infrastructure spending.
“With the start of government-backed infrastructure projects and the booming demand for defence equipment, things could look different in 2026. In fact, more companies now expect higher production a year from now,” Rubia added.
Fibre2Fashion News Desk (HU)