|Composite - Level||54.5||54.2||54.1|
|Services - Level||55.2||54.5||54.1|
The German economy began the new quarter on a slightly softer footing than originally reported according to the revised PMI data. At a final 54.2, the composite output index was 0.3 points weaker than previously estimated and only a tick higher than its final September mark.
The downward adjustment reflected both a less robust manufacturing sector (see Monday's PMI calendar entry) and, more significantly, a 0.7 point negative revision to the services PMI which now stands at 54.5. However, despite the unfavourable amendment, services continued to have a respectable month and there were solid gains in both new orders and backlogs, the latter seeing its strongest gain since June 2011. This could signal potential pressure on capacity in the future. Employment rose for a forty-sixth month and at its second fastest pace over the period. Even so, business optimism about the year ahead still declined to a 10-month low.
Input costs rose amidst signs of higher wages although the increase was only the weakest since February. Similarly, service provider charges also firmed while the inflation rate eased slightly.
Overall, the signs are that services had a decent start to the fourth quarter and the strength of new business bodes well. However the slide in business optimism is a worry and, combined with the deceleration in manufacturing activity, argues against an overly robust period for GDP as a whole.
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.
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.
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