DE: PMI Composite


Wed Mar 04 02:55:00 CST 2015

Consensus Actual Previous
Composite - Level 54.3 53.8 53.5
Services - Level 55.5 54.7 54.0

Highlights
Private sector business activity expanded at a slightly slower pace than originally thought in February. At 53.8, the final composite output index was still 0.3 points above its final January mark but 0.5 points short of its flash estimate. The downward revision was attributable to a weaker amended service sector PMI which now stands at 54.7, some 0.8 points below its earlier print and a smaller 0.7 points above its final reading at the start of the year.

Even so, new orders growth in services still accelerated to its fastest pace since last October and backlogs also increased slightly. Against this backdrop, companies continued to expand their workforce and the latest period of job creation equalled the strongest since December 2011.

Cost pressures continue to build and inflation climbed to a 4-month high on the back of increasing staff costs. At the same time, service provider charges posted their steepest annual gain since last June. Business expectations remained positive and above their long-run average.

Despite today's downward revision, February's PMI surveys make generally positive reading for the German economy. Although manufacturing (PMI 51.1) is still struggling the service sector seems to be acquiring real momentum and first quarter GDP growth looks on course for something not far short of 0.5 percent. Inflationary pressures according to this survey appear to be building again but so far there is minimal evidence of this in the official data.

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.