German manufacturing production levels rose at the quickest rate for more than three years in April, supported by an upturn in export orders, the latest HCOB PMI survey showed.
Goods producers were less optimistic about the outlook, however, and they continued to reduce workforce numbers, albeit at a slower pace. Notably, latest data showed a rise in average prices charged by German manufacturers for the first time in almost two years. This was despite input costs recording a sharp and accelerated decline.
The headline HCOB Germany Manufacturing PMI – a gauge of overall business conditions derived from measures of new orders, output, employment, supplier delivery times and stocks of purchases – registered 48.4 in April, up slightly from March's 48.3. The latest reading was the highest recorded for more than two-and-a-half years, which principally owed to a solid and accelerated increase in output.
Production levels rose across the German manufacturing sector for the second month in a row in April, after having fallen continuously for almost two years. April data likewise showed back-to-back increases in new orders across the goods-producing sector.
Backlogs of work fell at the quickest rate for three months in April. With firms completing more orders than they received during the month, this contributed to further job cuts.
The latest decline in employment coincided with a notable deterioration in manufacturers' growth expectations for the year ahead. Stocks of finished goods fell only modestly in April, recording the slowest decline for eight months.