The downturn in Germany’s manufacturing sector eased in April, although a longstanding decline in new orders picked up pace, a survey showed on Thursday (May 2).

The HCOB final Purchasing Managers’ Index (PMI) for manufacturing rose to 42.5 in April from 41.9 in March. The reading was slightly above the flash estimate of 42.2 but far below the 50 level that separates growth from contraction.

The sector accounts for about a fifth of the country’s economy.

“Anyone looking for encouraging economic signals from the manufacturing sector will be somewhat frustrated when analysing the HCOB PMI figures for Germany,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

He noted that new orders are falling even faster than before and, instead of restocking inventories of purchased goods, they continue to be depleted.

“This contrasts with the moderate yet discernible recovery observed in the manufacturing sectors of many other countries worldwide, suggesting that structural factors are exerting a significant dampening effect in Germany,” de la Rubia said.

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Manufacturers continued to grow in confidence about the year-ahead outlook, but the degree of optimism remained low by historical standards due to ongoing concerns about geopolitics and the domestic economy, the report said. REUTERS