Germany’s HCOB Manufacturing PMI slipped to 48.5 in September 2025, down from 49.8 in August, surprising market expectations for stabilization at 50, according to flash estimates. The reading signaled the steepest contraction in four months, as production continued to expand but at a softer pace than in August, while new orders fell for the first time in four months, marking the sharpest decline since January. Export sales also dropped for a second consecutive month. Firms relied on existing backlogs to support output, though outstanding business was depleted at the fastest rate in nine months. Employment fell further, with headcounts shrinking at the quickest pace in three months. On the cost side, purchase prices declined more steeply than in August, while output charges also decreased. Business expectations weakened for a second straight month, slipping below the long-run average amid sluggish demand and elevated operating costs.