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Economic Buzz: German manufacturing PMI signals stagnation in May
01-Jun-2026 14:37
Germany's manufacturing sector stalled in May as uncertainty and soaring costs linked to the Middle East war weighed on demand. The S&P Global Germany Manufacturing PMI slipped to 50.1 from April's 51.4, its lowest in four months and close to the 50.0 mark that signals no change.

Output growth eased to a marginal pace, the weakest since January, with firms either working through backlogs or slowing production due to weaker demand. New orders fell for the first time in 2026, with consumer goods hit hardest, while intermediate goods saw gains. Export sales also declined modestly for the first time since January.

Input costs surged at the fastest rate in nearly four years, driven by higher energy, fuel, transport, and commodity prices. Factory gate charges rose substantially, though firms were cautious about passing on costs. Supply chain delays worsened, with lead times stretching to their longest since June 2022 amid disruptions from the Strait of Hormuz closure.

Manufacturers cut purchasing activity and reduced inventories, while workforce numbers fell at the quickest pace since February 2025. Business expectations improved slightly from April's low but remained muted, reflecting concerns over inflation, uncertainty, and supply shortages.

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