German HCOB Manufacturing PMI Final (Feb) 50.9 vs. Exp. 50.7 (Prev. 49.1)
- "The headline PMI has climbed back above 50. That’s thanks to faster growth in output, a solid jump in new orders - helped a bit by stronger export demand - and longer delivery times, which usually signal rising demand."
- "Costs have been rising from all kinds of directions - metals, energy, wages, electronic components, and even the newly introduced Carbon Border Adjustment Mechanism (CBAM). Companies did manage to pass some of these higher costs on to customers, but margins likely still took a hit."
- “Optimism about future production has risen from an already high level. A lot of that confidence likely comes from government infrastructure stimulus and the big jump in defence spending, both of which are driving domestic demand."
Context
The German HCOB Manufacturing PMI for February has come in above expectations, rising to 50.9 from the previous 49.1, indicating a rebound in manufacturing activity. This suggests improving economic conditions, driven by higher output and new orders, which could positively influence the outlook for growth and potentially impact European Central Bank policy. However, rising costs are still a concern, possibly limiting profit margins and keeping inflationary pressures in focus.
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