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EMU: PMI Composite Flash
| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 52.8 | 52.4 to 53.6 | 51.9 | 52.4 |
| Manufacturing Index | 49.8 | 49.6 to 50.1 | 49.2 | 49.7 |
| Services Index | 53.2 | 53.0 to 54.0 | 52.6 | 53.1 |
Highlights
Eurozone business activity edged higher in December, completing a full calendar year of expansion for the first time since 2019, although momentum clearly softened towards year-end. The composite PMI fell to 51.9 from 52.8 in November, a three-month low, signalling continued but modest growth. Services remained the main engine, with the services PMI easing to 52.6 from 53.6, while manufacturing slipped further into contraction as the PMI declined to 49.2, its lowest level in eight months.
Demand conditions weakened. New orders continued to grow but at a slower pace, while new export orders fell sharply, recording their steepest decline since March, particularly in manufacturing. Activity diverged across countries, with Germany's output growth slowing to a four-month low and France close to stagnation, while the rest of the euro area maintained moderate expansion.
Employment provided a degree of resilience, rising for a third consecutive month, albeit only marginally, as job creation in services offset further losses in manufacturing. Inflationary pressures intensified, with input costs rising at a nine-month high and output prices increasing modestly.
Overall, the data indicate that the euro area economy is still expanding but is increasingly reliant on services amid fragile demand and mounting cost pressures. These updates take the RPI to minus 16 and the RPI-P to minus 7, meaning that economic activities are now lagging behind the expectations of the bloc.
Market Consensus Before Announcement
The composite is expected at 52.8 in the December flash versus 52.8 in November final. Manufacturing seen at 49.8 versus 49.6 in November. Services expected at 53.2 versus 53.6 in November.
Definition
The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector business activity by combining information obtained from surveys of the manufacturing and service sectors of the economy. The flash data are released around ten days ahead of the final report and are typically based upon around 75-85 percent of the full survey sample. Results covering a range of variables including manufacturing output, employment, new orders, backlogs and prices are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The survey, produced by S&P Global uses a representative sample of around 5,000 manufacturing and services companies, the former including Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece and the latter Germany, France, Italy, Spain and the Republic of Ireland.
Description
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.