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Germany April final manufacturing PMI 51.4 vs 51.2 prelim

Prior was 52.2Key findings:April sees further, albeit slower, increases in output and new orders Business expectations turn negative for first time in 18 months Cost pressures and supply delays worst since 2022Comment:Phil Smith, Economics Associate Director at S&P Global Market Intelligence: “The growth we’re seeing in the manufacturing sector appears to be on borrowed time, given the underlying factors driving it and the further sharp drop in business expectations into negative territory. “Output and new orders continue to be supported by the rush to secure supplies amid concerns over future price increases and shortages, with this frontloading of activity having the potential to lead to some payback in the coming months. Whilst we’re seeing strong growth in new orders received by makers of intermediate goods, i.e. those used to produce other goods, there has already been a marked decline in demand for consumer products. “Reflecting growing concerns about both demand and supply-side conditions, businesses expecting activity to fall in the coming year now outweigh those anticipating a rise. There are worries that surging inflation pressures and the associated squeeze on purchasing power will stifle demand, with factory gate price inflation jumping sharply to its highest in over three years in April. At the same time, with supply delays already at a level not seen since mid-2022, there is a risk that production could be scaled back regardless of the demand situation.”
This article was written by Giuseppe Dellamotta at investinglive.com.

🔗 Source

💡 DMK Insight

Manufacturing output is up, but the slowdown in growth and negative business expectations signal potential trouble ahead. April’s manufacturing data shows a slower increase in output and new orders, which could indicate that the sector is losing momentum. The fact that business expectations have turned negative for the first time in 18 months is particularly concerning, as it suggests that manufacturers are bracing for tougher times ahead. Coupled with rising cost pressures and supply delays, this paints a picture of a sector under strain. For traders, this could mean a reassessment of positions in related markets, especially if you’re holding stocks in manufacturing or commodities that rely on these inputs. Watch for key technical levels in indices tied to manufacturing, as a breach could trigger broader market reactions. On the flip side, if these pressures lead to a significant pullback in production, it could create buying opportunities in sectors that benefit from lower output, like tech or consumer goods. Keep an eye on upcoming economic indicators and earnings reports that might reflect these trends, particularly over the next few weeks.

📮 Takeaway

Watch for key technical levels in manufacturing-related stocks; negative expectations could signal a broader market pullback in the coming weeks.

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