Germany Manufacturing Growth Eases Slightly in September

The S&P Global Germany Manufacturing PMI fell to 53.8 in September 2026, down from a more than four-year high of 54.3 in August and slightly below market expectations of 54, according to a preliminary estimate. Nevertheless, the reading continued to signal a solid pace of expansion in the manufacturing sector. Manufacturers recorded another month of strong production growth, with the output index at 55.9, although the pace eased slightly from August’s 55-month high. This coincided with another robust increase in factory new orders. Meanwhile, employment moved closer to stabilisation, with payroll numbers recording their slowest decline since September 2023. On the price front, input-cost inflation remained elevated, driven in part by higher energy prices, while factory-gate price inflation eased to its lowest level in six months. Looking ahead, business sentiment improved.

The S&P Global Germany Manufacturing PMI was revised slightly higher to 54.3 in August 2026 from a preliminary of 54.1, compared to 52.2 in July. The reading showed that factory growth improved for a third straight month, reaching its strongest level since May 2022, driven by a solid rise in new orders, particularly in the intermediate goods sector, as well as stronger export sales. There was a range of factors driving demand, including increased defence spending, data centre build-outs and stockpiling. Also, the mood among businesses improved noticeably and is now the brightest seen since the Middle East conflict began. However, there was also a worsening of supply chain pressures, which in turn contributed to a marked rise in purchasing activity as firms looked to secure supplies of inputs. Average prices paid for purchases meanwhile rose at the slowest rate since the start of the Middle East conflict, but one that was still elevated by historical standards.

The S&P Global Germany Manufacturing PMI jumped to 54.1 in August 2026 from 52.2 in the previous month, surpassing market expectations of 52.0, according to preliminary estimates. It marked the seventh consecutive month of expansion and the strongest pace since May 2022, mainly driven by an acceleration in output, new orders, and export sales, all of which expanded at their fastest pace since early 2022. Survey respondents cited stronger demand linked to inventory rebuilding, rising defense spending, and continued investment in data-center infrastructure. On the inflation front, input cost pressures remained elevated by historical standards but eased slightly from July, suggesting that price pressures are becoming more manageable despite ongoing supply-side challenges. Lastly, business confidence improved significantly.