DE: PMI Composite

Thu May 04 02:55:00 CDT 2017

Consensus Actual Previous
Composite - Level 56.3 56.7 57.1
Services - Level 54.7 55.4 55.6

The final composite output index weighed in at 56.7, a 0.4 point increase versus its flash estimate to stand just 0.4 points short of its final March reading. The outturn would seem to confirm a very solid start to the second quarter by German private sector economic activity.

The upward revision to the headline measure reflected a 0.7 point positive adjustment to the services PMI which now stands at 55.4, only 0.2 points below its final print at the end of last quarter. As previously indicated, services continue to be buoyed by solid growth of new business although backlogs were down for the first time since January. Employment again expanded at a rapid clip and, indeed, the third fastest rate in nearly six years. Business sentiment touched a 3-month low but remained firmly positive.

Prices charged by service providers maintained a solid upward trend reflecting both higher costs and stronger demand conditions.

On current trends, second quarter GDP growth could reach a 0.7 percent quarterly rate. Combined with rising inflationary pressures, it would seem that the German economy is performing much as the ECB would want.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by Markit.

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.