Germany March final manufacturing PMI 48.3 vs 48.3 prelim

• Prior was 46.5

Key findings:

• Germany Manufacturing PMI at 31-month high.
• Germany Manufacturing PMI Output Index at 36-month high.
• Employment, stocks and prices continue falling

Comment:

Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:

“Growth has been a foreign concept for German industry for almost two years. In March, however, production in the manufacturing sector finally increased again, and more than just a little. A special factor plays a role here. There are hints that US importers have brought forward imports from around the world to beat the impending tariffs, which is apparent in the export orders of intermediate goods in the German industry. However, a setback is to be expected after the implementation of tariffs.

“In addition to the tariff-related front loading of imports, the improved sentiment on the stock markets, which had been boosted by the expected infrastructure and defence stimulus plans in recent weeks, may also have helped. In any case, companies have become somewhat more confident about future production, while at the same time they had to reduce sales prices less than in the previous month. With more fiscal policy flexibility now in place, it’s possible that the manufacturing sector could enjoy higher growth levels, potentially offsetting part of the negative impacts from the US tariffs.

“The demand situation has by no means improved across the board. The fact that delivery times have shortened again suggests that companies still have a lot of spare capacity. Manufacturers in Germany are still very reluctant to purchase input goods. In this respect, there are no signs that the downward stock cycle is about to turn around. The picture should change if a future German government creates new demand for the manufacturing sector, for example, by providing investment incentives and awarding contracts to the defence industry.”