By Maria Martinez
BERLIN, June 1 (Reuters) - Germany's manufacturing sector stalled in May as waning demand and soaring costs linked to the war in the Middle East weighed on activity, a business survey showed on Monday.
The S&P Global Germany Manufacturing Purchasing Managers' Index (PMI) fell to 50.1 in May from 51.4 in April, a survey by S&P Global showed, holding above the 50 mark separating growth from contraction.
"The upturn in the manufacturing sector stalled in May, confirming the warning signs
from recent PMI surveys that growth, being driven by the frontloading of orders, was likely to fade," said Phil Smith, Economics Associate Director at S&P Global Market Intelligence.
Output growth slowed for a second straight month to its weakest pace since the current expansion began in January and backlogged orders fell after rising in each of the previous three months.
New orders fell for the first time in five months, and export sales also declined for the first time since January, the survey showed. Firms cited geopolitical uncertainty and high prices, although some customers brought forward orders to avoid disruption and price rises.
Cost pressures intensified further, with input price inflation reaching its highest since June 2022.
"With margins under pressure, something had to give, and that 'thing' was employment, with factory job losses accelerating to the quickest since early 2025," Smith said.
Business expectations for production over the coming year improved slightly and returned to positive territory.
However, sentiment remained well below February's level, amid concerns about inflation, customer hesitancy and supply shortages.
(Reporting by Maria Martinez; Editing by Toby Chopra)
