|Composite - Level||54.4||54.2||53.9|
|Services - Level||54.6||54.2||54.1|
The Eurozone private sector economy was just slightly softer than previously thought in November. A 54.2 final reading on the composite output index was 0.2 points shy of its flash estimate but still 0.3 points higher than its final October mark and far enough above the 50 growth threshold to indicate a solid month for business activity.
The minor downward revision reflected a 0.4 point negative adjustment to the services flash PMI which, at 54.2, is now just 0.1 points above its final level at the start of the quarter. Within services, new orders and backlogs were up and job creation rose more quickly than in any month since May. Input costs increased at a relatively mild rate and well below the series average, paving the way for a second successive decrease in service provider charges.
Regionally, in terms of composite output, the best performer was Ireland (60.2) ahead of Spain (56.2) and Germany (55.2). Italy (54.3) also had a good month and all four countries registered multi-month highs. However, France (51.0) continued to underperform with a 3-month low that could be only partially attributed to the Paris terrorists' attacks.
The November report leaves Eurozone fourth quarter GDP growth on course for a 0.4 percent quarterly rate which would be a tick above the third quarter's flash estimate (revised data due tomorrow). Rising new and unfilled orders suggest a moderately respectable start to 2016 but much will depend upon the performance of Germany. In any event, the recovery is still too slow to put any upward pressure on consumer prices and, indeed, the downward revision to last month's composite output index will simply add to easing expectations for today's ECB meeting.
The Eurozone Composite PMI is produced by Markit and is based on original survey data collected from a representative panel of around 5,000 manufacturing and services firms. National manufacturing data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. National services data are included for Germany, France, Italy, Spain and the Republic of Ireland.
The Eurozone Services PMI (Purchasing Managers' Index) is produced by Markit and is based on original survey data collected from a representative panel of around 2,000 private service sector firms. National data are included for Germany, France, Italy, Spain and the Republic of Ireland. These countries together account for an estimated 80% of Eurozone private sector services output.
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.