State of German exports better for 1st time since May 2023: S&P Global

The headline Hamburg Commercial Bank (HCOB) Germany manufacturing purchasing managers’ index (PMI) export conditions index registered 50.7 in February, up from 49.4 in January and indicative of a marginal expansion of international economic activity on a trade-weighted basis.

The index was the highest since May 2023 and more than three points higher than last October's 11-month low of 47.6.

A recovery in German export conditions was supported by the fastest expansion of output volumes across North America since June 2023, S&P Global said in a release.

Despite a nascent rebound in economic activity among Germany's key trading partners, there was little sign of a turnaround in manufacturing export orders during February.

The seasonally-adjusted HCOB Germany manufacturing PMI new export orders index dropped to 42.3 in February from 42.5 in January, which marked two years of continuous decline. This is the longest period of falling export orders since the survey began in 1996.

Moreover, the latest reduction in export sales was the steepest of all nations monitored by PMI surveys in February. This illustrates that structural headwinds to German manufacturing performance have persisted so far in 2024 that have held back export sales in spite of a more favourable backdrop for global trade.

Survey respondents cited competitive pressures in major overseas markets, lacklustre investment spending among clients and an exposure to weak demand for consumer goods across Europe.

A marginal deterioration in European export conditions was observed, but the rate of decline was the slowest since the downturn began in May 2023.

There was a mixed picture of economic performance among major euro area export destinations. Ireland, Spain and Greece saw accelerated expansions in February, while Italy cemented its recent return to modest growth.

In contrast, private sector output in France contracted for the ninth month running, albeit at the slowest pace seen over this period.

Fibre2Fashion News Desk (DS)