DE: PMI Composite

Tue Dec 05 02:55:00 CST 2017

Consensus Actual Previous
Composite - Level 57.6 57.3 56.6
Services - Level 54.9 54.3 54.7

The final November composite output index was 57.3, implying a minor 0.3 point downward revision to its flash print and a reduced 0.7 point increase versus its final October mark.

The negative revision reflected a weaker services sector and the flash PMI was shaded 0.6 points lower to 54.3, a 3-month low. This widened the gap with its manufacturing counterpart to 3 points.

Nonetheless, the sector still saw another robust increase in incoming new business, albeit at a slower rate than in October and the same was true of employment. Meantime, backlogs were up for the fifth time in the last six months. Business confidence remained strong but still slipped further and touched its second lowest point mark so far in 2017.

Inflation developments were firm. Input costs climbed sharply again, in part on the back of stronger wage growth. Service provider charges rose for a third month running to yield an inflation rate that was only just below March's recent peak and amongst the fastest recorded over the past nine years.

The final November results are a little disappointing but still solid enough to signal another quarter of very respectable economic growth. Indeed, current readings of the composite output index point to a quarterly increase in real GDP of around the 0.8 percent mark.

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.