DE: PMI Composite


Wed May 06 02:55:00 CDT 2015

Consensus Actual Previous
Composite - Level 54.2 54.1 55.4
Services - Level 54.4 54.0 55.4

Highlights
German service sector activity in April was slightly softer than previously reported. At 54.0, the final PMI was 0.4 points below its flash estimate, 1.4 points down from its final March reading and at a 3-month low. The composite output index was also revised down and at 54.1 now shows a drop of 0.3 points versus the end of the first quarter.

Still, it was not all bad news as new business rose at a robust rate, albeit somewhat short of March's rise, and employment expanded for an eighteenth consecutive month. That said, there were further signs that skills shortages and the effects of the new national minimum wage are having a negative impact on payrolls. Backlogs fell slightly again but optimism about the year-ahead outlook remained elevated.

Input costs were strong enough to see their annual rate accelerate for a third straight month and to its highest level in almost a year. Service provider charges also rose and inflation here was the most marked since June 2014.

Overall, and despite the small downward revisions, the final PMI data suggest that the German service sector began the current quarter on a strong footing. Higher staffing costs appear to be putting upside pressure on output prices but the ECB will certainly not be unhappy to see this.

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.