Manufacturers in Germany reported a third straight monthly rise in output levels in May, with production being scaled up in line with further growth in new export orders, the latest HCOB PMI survey showed.
The declines in employment and purchasing activity across the sector meanwhile slowed, with the latter coming close to stabilizing. This corresponded with improved sentiment towards the year-ahead outlook for output.
On the price front, average charges for manufactured goods showed a renewed decline after rising in April for the first time in nearly in two years. The discounting of output prices reflected competition for new work, according to reports from surveyed business, and was aided by a further steep drop in input costs.
The headline HCOB Germany Manufacturing PMI registered 48.3 in May, down slightly from April's 32-month high of 48.4 and below the neutral 50.0 threshold that separates improvement from deterioration for the thirty-fifth straight month.
Supporting the upturn in output was a second straight monthly rise in new export orders. After returning to growth for the first time since early 2022 in April, international sales rose at a slightly accelerated rate in May, albeit one that was still only modest overall.
German manufacturers' buying levels meanwhile fell only fractionally, registering the smallest decline since the current downturn in purchasing activity began in mid-2022.
Delivery times on purchases shortened in May, amid reports from surveyed businesses of better availability. That said, the improvement in supplier performance was among the least marked in the past two-and-a-half years.
Average prices paid for purchases fell markedly again midway through the second quarter, albeit with the rate of decline easing slightly from April's 13-month record.
Lastly, May data indicated stronger optimism among German manufacturers towards growth prospects in the next 12 months. After dropping to a four-month low in April, expectations rebounded to the highest since February 2022 and were stronger than the long-run average.