Key facts
- Germany's manufacturing PMI rose to 52.2 in July, indicating growth.
- Poland's manufacturing PMI increased to 49.0 in July, signaling a less severe downturn.
- German output growth was the fastest since February 2022.
- German export sales grew at the strongest rate since February 2022.
- Poland's manufacturing employment increased for the first time in 15 months.
- Input cost inflation in Germany slowed to its lowest since February.
Germany's manufacturing sector experienced a robust start to the third quarter, with business activity expanding in July at its strongest pace since May 2022. This growth was propelled by faster output expansion and a significant rebound in export sales, according to S&P Global's final Purchasing Managers' Index (PMI). The PMI rose to 52.2 from 50.3 in June, indicating a clear expansion. Output increased at its fastest rate since February 2022, driven by stronger demand and efforts to clear backlogs. New orders also rose for the second consecutive month, with export sales showing the strongest growth since February 2022. Cost pressures moderated, with input price inflation slowing to its lowest since February and output charge inflation easing to its weakest since March, though both remained historically elevated. Business expectations, however, remain subdued due to ongoing geopolitical uncertainty.
In parallel, Poland's manufacturing sector saw its downturn ease in July. The PMI rose to 49.0 from 46.1 in June, signaling slower declines in output and new orders. Notably, manufacturing employment increased for the first time in 15 months. While new export orders continued to fall, the rate of contraction was the slowest since January. Input cost inflation eased to a five-month low, and output price inflation slowed to its weakest rate since March.