Private sector business activity was slightly less weak than originally thought in September. The headline composite output index weighed in at 46.4, up a couple of ticks versus its flash estimate and now 2.2 points above its final print in August. However, the latest reading continues to point to a significant contraction at quarter-end.

The positive revision was attributable to services where the 49.8 flash PMI was amended to 50.3. Even so, demand remained very soft and new business fell at an accelerated rate versus August. Backlogs similarly declined and employment decreased for the first time since mid-2020 as business expectations about the year ahead deteriorated further.

Service sector companies saw another sharp increase in input costs, but competitive pressures helped to ensure that output charges rose at the slowest in almost two-and-a-half years.

The final September data confirm another poor month for German business activity. Indeed, taken at face value they point to a contraction in third quarter GDP. Today's update puts the German RPI at minus 5 and the RPI-P at minus 2, both measures showing the economy in general is performing much as expected.

No revisions are expected leaving the headline composite output index at 46.2, up from August's final 44.6.

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 S&P Global.

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.