The HCOB Germany Manufacturing PMI fell to 47.7 in December 2025 from 48.2 in November, below expectations of 48.5, marking the sharpest downturn in ten months, according to preliminary estimates. Output slipped back into contraction, ending a nine-month run of growth, while new orders declined to its fastest pace since January, driven in part by a deeper fall in export sales. Backlogs of work continued to decline for a second consecutive month, reflecting weak demand and limited capacity pressures. Employment in the manufacturing sector fell again, although the pace of job losses eased slightly compared with November. On the price front, manufacturers recorded a rise in input costs for the first time since January 2023, linked to higher commodity prices, particularly metals, and longer supplier delivery times. Despite weaker current conditions, business confidence among manufacturers improved, with optimism about the year ahead rising to a six-month high.

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