German Manufacturing PMI Falls Below 43, Recession Fears Grow
Germany's factory sector contracted at the fastest pace in 14 months, adding to fears that Europe's largest economy may slip into a technical recession.
Tobias Richter
European Markets Editor
The S&P Global Germany Manufacturing PMI plunged to 42.8 in February, down from 44.1 in January and well below the 50 threshold that separates expansion from contraction. The reading was the lowest since December 2024.
New orders fell at the steepest rate in over a year, with manufacturers citing weak demand from both domestic and export customers. The automotive sector, a bellwether for German industry, reported particularly sharp declines.
"Germany is in an industrial recession," said Tobias Richter, European markets editor. "The combination of high energy costs, Chinese competition, and a sluggish construction sector is creating a perfect storm for manufacturers."
The data strengthens the case for further ECB rate cuts and puts additional political pressure on the German government ahead of state elections in March. German equities underperformed the broader European market, with the DAX falling 0.6%.
The composite PMI, which includes services, fared better at 49.2, suggesting the economy as a whole is stagnating rather than contracting sharply. Services have provided a buffer, with tourism and hospitality showing resilience.