German Manufacturing Growth Hits Four-Month High

Germany's S&P Global Manufacturing PMI rose to 52.2 in July 2026 from 50.3 in June, well above market expectations of 50.5, according to a preliminary estimate. The reading signaled the strongest expansion in the sector in four months, driven by a sharp increase in output, which grew at its fastest pace in nearly four-and-a-half years amid stronger order inflows, higher capacity utilization, and frontloading activity. New orders continued to improve, with export demand posting its strongest increase since February 2022. On the inflation front, input cost growth eased to a five-month low, while output price inflation also moderated. Business confidence strengthened during the month but remained below its historical average.

The S&P Global Germany Manufacturing PMI was revised higher to 50.3 in June 2026 from a preliminary of 50, pointing to small growth in factory activity, compared to 50.1 in the previous month. There was a modest rise in output that was supported by a slight uptick in demand, while goods producers were a little more optimistic about the outlook. In addition, reports of delays and cost pressures both eased from the recent highs but firms continued to face substantial disruption across supply chains and a steep rate of input price inflation, both principally linked to the fallout from the war in the Middle East. "On the whole, it was a slightly more positive set of results for the German manufacturing sector in June than we saw the month before", according to Phil Smith, Economics Associate Director at S&P Global Market Intelligence .

The S&P Global Flash Germany Manufacturing PMI slipped to 50 in June 2026 from 50.1 in May, falling short of expectations of 50.5. This marked a five-month low, indicating that factory activity has largely stalled despite a marginal acceleration in output growth. New orders in manufacturing edged slightly higher, with a similar uptick recorded in new export business. However, overall momentum remained weak. Meanwhile, cost inflation eased but stayed elevated by historical standards. Manufacturer expectations improved for a second consecutive month, though sentiment remained subdued overall.