German production volumes and export orders rose in May

In May, manufacturing activity in Germany declined. However, this sector saw growth in output volumes for the third month in a row, driven by an ongoing increase in new export orders.

Germany's Manufacturing Purchasing Managers' Index stood at 48.3 in May, slightly below April's figure of 48.4. The index has remained below 50, the threshold dividing decline from growth, for 35 consecutive months.

International sales grew at a moderate pace in May. At the same time, demand for German goods increased in Europe, and sales expanded in the United States. According to Reuters, this was partly due to the accumulation of product inventories ahead of a potential increase in US import tariffs.

Employment in Germany continued to shrink, though at the slowest rate since January 2024. Purchasing activity nearly stabilized, showing the smallest drop since mid-2022. Business expectations recovered in May, reaching their highest level since February 2022 thanks to hopes for increased government spending and a potential US-EU trade agreement.