DE: PMI Composite

Mon Nov 06 02:55:00 CST 2017

Consensus Actual Previous
Composite - Level 56.9 56.6 57.7
Services - Level 55.2 54.7 55.6

The final composite output index for October was 56.6, a 0.3 point downward revision from its flash estimate and 1.2 points short of its final September outturn.

The negative adjustment was attributable to a weaker services sector where the flash PMI was shaded 0.5 points to 54.7, nearly a full point below its final posting at the end of last quarter. However, growth of new business accelerated for a third consecutive month to register its strongest rate since February 2016. In addition, outstanding business also advanced for the fourth time in the last five months while job creation was the most marked since May. Business optimism was also strong having declined from a 6-year high in September.

Inflation pressures continue to build. Service sector input costs were boosted by higher salaries and fuel prices and gains here translated to a slight pickup in the rate of output price growth.

The negative revision to service sector activity was unusually large and widens the performance gap with manufacturing (PMI 60.6). Still, in general forward-looking indicators remain very positive and all the signs are that fourth quarter real GDP growth will not struggle to impress.

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.