German PMI rises above growth threshold in February, marking its first expansion in more than three and a half years

Germany’s Manufacturing Sector Returns to Growth

In February, the HCOB Germany Manufacturing PMI® rose above the expansion threshold for the first time in more than three and a half years. This improvement was largely fueled by notable gains in both production and new orders. The index also benefited from a slower pace of decline in employment and purchasing inventories.

Business confidence continued to strengthen, reaching its highest point since February 2022. However, the latest survey also revealed that manufacturers in Germany, the eurozone’s largest economy, are experiencing mounting cost pressures, with input price inflation hitting its highest level in over three years.