May flash PMI data signals contraction in Germany’s manufacturing sector, missing expectations and weighing on growth outlook.
Germany’s May flash manufacturing PMI fell to 49.9, below the 51.0 forecast and down from April’s 51.4, signaling a contraction in the sector. The services PMI rose to 47.8, slightly above expectations but still in contraction territory, while the composite PMI edged up to 48.6 from 48.4.
The decline in manufacturing contrasts with recent improvements in services, though both remain below the 50 threshold that separates expansion from contraction. Analysts had anticipated a modest rebound in manufacturing, reflecting cautious optimism about industrial activity.
The data underscores persistent weakness in Europe’s largest economy, with mixed signals across sectors. Market reaction remains muted as investors await further details on policy responses and economic trends.