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EMU: PMI Composite Flash
| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 51.6 | 51.0 to 52.5 | 53.1 | 52.1 |
| Manufacturing Index | 52.7 | 51.8 to 53.0 | 52.7 | 52.8 |
| Services Index | 51.4 | 51.0 to 52.0 | 53.0 | 51.7 |
Highlights
The euro area entered the final weeks of the third quarter with stronger momentum. The composite PMI rose from 52.0 in August to 53.1 in September, its highest reading in 41 months and 1.5 points above the consensus forecast for the month. Services accelerated, manufacturing output reached a 55-month high, and France returned to growth after ten months of contraction.
Demand gives the expansion greater weight as new orders grew at their fastest pace since May 2022, while backlogs increased for the first time since June 2022. Yet hiring remained modest. Firms appear to be meeting stronger demand largely through existing capacity rather than substantial recruitment. The outlook is less assured than the output figures suggest.
Input costs and selling prices rose at their fastest rates since May, while business confidence slipped to a three-month low. Germany’s stronger growth and France’s return to expansion are encouraging, but weak hiring and renewed price pressure may limit how far the recovery can extend. The latest update takes the RPI to 24 and the RPI-P to 25, meaning that economic activities continue to outpace market expectations in the Euro Area.
Market Consensus Before Announcement
The consensus sees the composite flash for September at 51.6, close to the 52.0 final August index. That suggests ongoing slow expansion.
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.