DE: PMI Composite


Fri Jul 03 02:55:00 CDT 2015

Consensus Actual Previous
Composite - Level 54.0 53.7 52.6
Services - Level 54.2 53.8 53.0

Highlights
The private sector economy slightly undershot earlier estimates in the final PMI results for June. Hence, the 54.2 flash reading for the services PMI was lowered 0.4 points to 53.8, prompting a 0.3 point downward adjustment to the flash composite output index which now stands at 53.7. However, both indices were up from their final May outturns of 53.0 and 52.6 respectively.

The service sector expanded for a twenty-fifth successive month despite a slowdown in orders growth which posted its weakest rate so far in 2015. As a result, output here was supported by a further reduction in backlogs, their fourth decline in as many months. Even so, headcount continued to rise, extending the current run of jobs growth to twenty months. Business sentiment also improved versus May.

Higher staff costs and rising fuel prices prompted another increase in input costs lifting the rate of cost inflation in line the series long-run average. Service provider charges also rose but the rate of inflation here was down slightly versus mid-quarter.

Stronger activity rates in both manufacturing and services suggest that the apparent pick-up in economic growth at quarter-end was relatively well balanced. Rising service provider inflation will also go down well at the ECB. Nonetheless, the economy is struggling to live up to earlier expectations and without increased momentum in the third quarter, forecasts for calendar year GDP growth in 2015 will probably have to be revised down.

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.