The mid-quarter decline in business activity was just marginally shallower than previously reported. The 46.1 flash composite output index was revised up to 46.3 but still stands 0.7 points short of its final reading in January, well below the 50-expansion threshold and at its weakest level in four months.

The 48.2 flash sector PMI was revised up just marginally to 48.3 and still reflects declining new business and employment. Backlogs also fell at one of the steepest rates seen in the last three-and-a-half years. Even so, employment increased by the most in eight months and at a rate above the long-run series average. The upturn here coincided with improved optimism about the outlook with expectations rising for a third straight month and to their highest mark since April last year.

However, inflationary pressures strengthened again with the rate of change in input costs accelerating to its highest level since last April on the back of increased wage demands. In turn, output price inflation posted its strongest rate since last August.

Overall, the revised January data remain consistent with a contraction in first quarter GDP. However, the ECB will no doubt be worried about the apparent boost to inflation being provided by strong wage growth. Today's update puts the German RPI at minus 9 and RPI-P at minus 3. Economic activity in general is lagging just marginally behind market expectations.

No revisions are expected leaving the composite output index at 46.1, down from January's final 47.0.

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.