DE: PMI Composite


Wed Aug 03 02:55:00 CDT 2016

Consensus Actual Previous
Composite - Level 55.3 55.3 54.4
Services - Level 54.6 54.4 53.7

Highlights
The final composite output index weighed in at a 7-month high of 55.3, unrevised from the flash estimate released a couple of weeks ago and indicative of a decent month for the German economy.

The unrevised outturn masked a marginally stronger services sector where the flash PMI was adjusted 0.1 points higher at 53.8. However, this was still 0.7 points below its final posting in June. Even so, growth of new orders accelerated and an increase in sector headcount was the most marked so far in 2016. Additions to payrolls helped businesses reduce backlogs for a third time in the past four months but business sentiment, while remaining optimistic, slipped to an 8-month trough.

Input costs rose again and the rate of cost inflation touched a 32-month peak, in part reflecting higher wage rates. Some of this increase translated into another rise in output prices but, although inflation here saw its highest mark in four months, it remained historically soft.

The economy looks to have begun the third quarter on a relatively sound footing with manufacturing and services performing in much the same vein. Inflation pressures also seem to be moving in the right direction. The ECB must be relieved about the lack of any obvious Brexit impact but, with an eye on the rest of the region, will still be hoping for more dynamic growth further down the road.

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.