DE: PMI Composite


Tue Jan 06 02:55:00 CST 2015

Consensus Actual Previous
Composite - Level 51.4 52.0 51.7
Services - Level 51.4 52.1 52.1

Highlights
German services performed rather better than originally thought in December. The final sector PMI was 52.1, up 0.7 points versus its flash estimate and high enough to lift the final composite output index to 52.0, up from a provisional 51.4 and 0.3 points higher than its final mid-quarter outturn.

New business placed with service providers declined for the first time since June 2013 and the rate of job creation slowed marginally compared with November although it remained above its long-run average. Higher headcount allowed companies to reduce backlogs and the rate of depletion here was the most marked since the middle of 2013. Business expectations were moderately positive with regards to the coming year.

Input costs were up again in December but their rate of increase fell to the lowest level in nearly five years courtesy of weaker fuel charges. Even so, firms felt able to raise output prices for the first time in three months.

The final December data suggest that real GDP expanded only marginally in the fourth quarter. The current period should see another increase in total output but the recent trend in orders has been lacklustre and the chances are that the economy will again prove disappointingly sluggish. Against this backdrop, consumer prices look set to remain very soft for some time yet and the record low on 10-year bund yields seen this morning (below 0.49 percent) is unlikely to last long.

Definition
The Germany Composite PMI is based on original survey data collected from a representative panel of 1,000 companies based in the German manufacturing and service sectors. The final Germany Composite PMI follows on from the flash estimate which is released a week earlier and is typically based on at least 75 percent of total PMI survey responses each month.

The Germany Services PMI is produced by Markit and is based on original survey data collected from a representative panel of over 500 companies based in the German service sector. The final Germany Services PMI follows on from the flash estimate which is released a week earlier and is typically based on at least 75 percent of total PMI survey responses each month.


Description
The Purchasing Managers Index (PMI) survey has developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the European Central Bank) use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.