FX.co ★ German Factory Slump Eases in July

In July 2025, Germany's HCOB Manufacturing PMI slightly increased to 49.2 from June's 49, according to preliminary figures, although it missed the market forecast of 49.5. While the index remained below the critical 50 mark, it suggested stability within the sector. Manufacturing output marked its fifth consecutive month of growth, albeit growing at its slowest pace in five months. Export sales continued to bolster the sector, achieving a four-month growth streak, while new orders largely remained stable after a significant rise in June. Employment in the sector experienced another decline, though the rate of job loss slowed, reflecting a cautious yet optimistic outlook among manufacturers. Moreover, factory gate prices declined for the third consecutive month—the steepest drop since February—due to reduced input costs and favorable exchange rate dynamics. Despite a slight decline in business confidence from June’s peak, it stayed above the long-term average, buoyed by better investment conditions and ongoing policy incentives.