DE: PMI Composite


Tue Apr 07 02:55:00 CDT 2015

Consensus Actual Previous
Composite - Level 55.3 55.4 53.8
Services - Level 55.3 55.4 54.7

Highlights
Private sector economic activity closed out the first quarter on a strong note. With the flash service sector PMI revised up a tick to 55.4, a 6-month high, the final composite output weighed in at the same mark, up from a final 53.8 in February and at an 8-month peak.

Within services, new business saw its largest rise since last September and, while backlogs declined, continued employment growth suggests that this was a deliberate policy on the part of producers. Indeed, despite slowing versus February, the rate of job creation remained above its long-run trend.

Input cost inflation accelerated reflecting a combination of the introduction of the national minimum wage in January and a weak exchange rate. In response, service providers raised their prices for a second consecutive month. Meantime, business expectations saw their highest level in four years.

The minor revisions to the flash PMI data leave intact a robust picture of German business activity in March. First quarter real GDP growth should be on course for something around the 0.5 percent mark and buoyant orders suggest that the current period should be another good one for total output. Stronger prices will be just as welcome at the ECB.

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.