German Manufacturing Expands for First Time Since 2022

The HCOB Germany Manufacturing PMI was revised slightly up to 50.9 in February 2026 from a preliminary of 50.7, compared to 49.1 in January. The PMI climbed into growth territory for first time in over three-and-a-half years, driven in large part by stronger increases in both output and new orders and slower decreases in employment and stocks of purchases. There was also an increase in cost pressures, with input price inflation hitting its strongest in over three years. Factory gate charges rose for the first time four months, albeit only modestly. Meanwhile, business expectations reached their highest since February 2022. “A lot of that confidence likely comes from government infrastructure stimulus and the big jump in defence spending. We expect domestic demand to be the main driver of manufacturing growth this year”, Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said.

The HCOB Germany Manufacturing PMI climbed to 50.7 in February 2026, up from 49.1 and well above forecasts of 49.5, according to a preliminary reading. The move above the 50 threshold signals that Germany’s manufacturing sector expanded for the first time since June 2022. Output increased for a second consecutive month, marking the strongest pace since October, while new orders posted their fastest growth in nearly four years, supported by a rebound in export demand. Backlogs of work rose for the first time since May 2022, and although employment continued to decline, the pace of job losses was the second-slowest in almost two-and-a-half years. On the pricing side, input costs rose for a third straight month at the fastest rate since December 2022. Output prices also increased, though only marginally, ending a three-month period of declines.

The HCOB Germany Manufacturing PMI was revised higher to 49.1 in January 2026 from a preliminary of 48.7, the highest reading in three months, compared to 47 in December. Output levels returned to growth after a brief contraction in December, supported by increased intakes of new orders, which rose for the first time in three months, albeit only marginally. However, despite a slight improvement in firms' expectations for activity in the coming 12 months, there was another marked drop in factory workforce numbers, as well as further notable decreases in both pre- and postproduction inventories. There were also growing cost pressures across the sector as input prices rose at the quickest rate for over three years. Still, average factory gate charges fell slightly due to strong competitive pressures.