| Consensus | Actual | Previous | |
|---|---|---|---|
| Composite Index | 47.2 | 47.5 | 48.4 |
| Services Index | 50.6 | 50.6 | 51.2 |
Highlights
Business activity slowed significantly in the service sector at the end of the third quarter. The sector PMI dropped 0.6 points to an unrevised 50.6, still above the 50-expansion threshold but the lowest level in six months.
New business declined by the most since February with export demand especially weak. For the third month in a row, jobs were also cut and rising recession concerns saw business sentiment hit its lowest point in a year.
The inflationary pressures diminished as input costs increased at the weakest rate since February 2021, primarily due to smaller wage increases. Output price inflation also eased but continued to exceed pre-pandemic levels. The slowdown in cost increases provides some respite for businesses although the overall outlook for growth remains bleak. Today's update puts the RPI at minus 1 and RPI-P at 8, showing economic activity in general broadly matching the consensus.
New business declined by the most since February with export demand especially weak. For the third month in a row, jobs were also cut and rising recession concerns saw business sentiment hit its lowest point in a year.
The inflationary pressures diminished as input costs increased at the weakest rate since February 2021, primarily due to smaller wage increases. Output price inflation also eased but continued to exceed pre-pandemic levels. The slowdown in cost increases provides some respite for businesses although the overall outlook for growth remains bleak. Today's update puts the RPI at minus 1 and RPI-P at 8, showing economic activity in general broadly matching the consensus.
Market Consensus Before Announcement
No revisions are expected to the flash data.
Definition
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.
Description
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.
