German manufacturing PMI rose for the first time since the war in Ukraine.

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By Geoffrey Smith

Investing.com — Europe’s largest manufacturing economy grew in November for the first time since Russia invaded Ukraine, according to a closely watched economic survey.

The manufacturing managers’ index compiled by S&P Global rose to 46.7 from 45.1 in October, defying expectations of a decline and remaining well below the level of 50 that normally separates growth from contraction.

A comparable index for the services sector rose surprisingly, with the composite PMI rebounding to 45.1 from 46.4.

“November’s PMI survey doesn’t change the narrative that Germany is headed for recession, but we expect the economic contraction to be shallower than first feared,” S&P economist Phil Smith said in a statement.

S&P noted that companies have seen a marked slowdown in rising input prices that have dogged the industry all year. It said that for the first time since July 2020, manufacturers reported an outright improvement in lead times on inputs due to “improved material availability”.

That’s consistent with private reports from individual companies, such as Siemens (ETR:SIEGn ), which have clearly eased supply chain bottlenecks over the past few months.

As a result, import costs rose at the slowest rate since the middle of last year, S&P noted.

“We still have a recession but not a collapse,” Commerzbank Chief Economist Joerg Kraemer tweeted, playing down growth to increasing signs Germany will go through next winter without relying on gas rationing.

After much debate, Germany’s government agreed to a bill this week that would limit household gas bills over the winter. Households and small businesses will pay interest for 80% of their spending, and are exposed to market prices for the remaining 20%. Industry must pay no more than 7c per kilowatt-hour for 70% of consumption and market price for the rest.

German manufacturing PMI rose for the first time since the war in Ukraine.

UK PMI hits 21-month low as orders weaken

Eurozone business activity unexpectedly moderates in November – S&P Global

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