- Prior was 50.1
Key findings:
- Manufacturing sector posts modest output growth as cost pressures show first signs of easing
- Output growth ticks up slightly amid renewed, albeit marginal, rise in new orders
- Cost inflation retreats from May’s four-year high
- Business expectations edge higher but remained subdued
Comment:
Phil Smith, Economics Associate Director at S&P Global Market Intelligence:
“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, not only in terms of growth indicators but also the underlying metrics on price pressures and supply disruption.
“The sector ended the second quarter with a modest rise in production volumes. It’s still the case that firms are partly relying on backlogged orders to support output, which isn’t sustainable in the long run, but we did see new orders return to growth in June, albeit rising only marginally. There’s still the risk of some payback from the front-loading of orders we’ve seen in recent months which, alongside high price levels and still relatively elevated levels of uncertainty, is likely to weigh on growth in the near term.
“Encouragingly, we saw the rate of input cost inflation retreat from May’s near four-year high as the drop in oil prices started to filter through. The direction of travel of prices in the coming months is clearly dependant on developments in the Middle East, though some lagging inflationary pressures can be expected to remain in the system regardless.”
This article was written by Giuseppe Dellamotta at investinglive.com.
