Germany’s economic outlook improved slightly in October, as PMI Manufacturing index rose to 42.6 from 40.6, while PMI Services climbed to 51.4 from 50.6. This led to a rise in Composite PMI to 48.4 from 47.5, offering some hope for the start of Q4.
Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, highlighted that the start to Q4 is “better than expected.” With manufacturing shrinking at a slower rate and services expanding more quickly, he noted that growth in Q3 is a “distinctive possibility.”
However, despite these improvements, Germany’s GDP is still forecast to remain flat for the year, following a 0.3% contraction in 2023, as projected by the International Monetary Fund.
De la Rubia also pointed to the “structural weaknesses” weighing down the German economy. Key issues such as high energy costs, rising competition from China, and ongoing labor market shortages are continuing to strain the manufacturing sector.
