Germany’s Manufacturing Unexpectedly Rose, Overall Business and Labor Conditions Fell Behind 

Better-than-expected Manufacturing PMI Recorded for Germany  

In October 2023, the HCOB Flash Germany Manufacturing PMI registered a 5-month high of 40.7, surpassing the previous record of 39.6 in September and exceeding expectations of 40.  

Although manufacturing new orders showed substantial losses, it displayed signs of easing and reached its lowest level since June. At the same time, the rate at which companies were reducing their workforce was the fastest since October 2020. On the pricing front, factory gate charges continued their downward trend for the fifth consecutive month, although the rate of decline slowed compared to previous months. On the flip side, manufacturers continued to face significant drops in the costs of purchasing materials. Lastly, it’s worth noting that manufacturers still held pessimistic expectations for the future. 

(HCOB Flash Germany Manufacturing PMI，S&P Global) 

German Composite PMI Displaying Lukewarm Business Activities  

According to an initial estimate, the HCOB Germany Composite PMI fell to 45.8 in October 2023, lower than September’s 46.4 and below the market’s expected 46.7. This indicates a decline in overall economic activity. The service sector, which had shown a slight improvement the previous month, returned to contraction, while manufacturing output continued to decrease. The inflow of new business experienced the sharpest decline since May 2020, and backlogs of work decreased again. 

In addition, there was a rise in unemployment compared to September when workforce numbers had declined for the first time in nearly 3 years. In terms of prices, the rate of inflation for output charges remained relatively stable in October, following a low point in September. Finally, businesses maintained a low level of confidence in the outlook for the year ahead.  

(HCOB Flash Germany Composite PMI Output Index，S&P Global) 

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