markit flash eurozone pmi dec 2012
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Page 1 of 4 © Markit Economics Limited 2012
News Release Purchasing Managers’ Index®
MARKET SENSITIVE INFORMATION EMBARGOED UNTIL: 0900 (UK Time) 14 December 2012
Markit Flash Eurozone PMI® Eurozone downturn eases as Germany returns to growth Flash Eurozone PMI Composite Output Index(1) at 47.3 (46.5 in November). Nine-month high.
Flash Eurozone Services PMI Activity Index(2) at 47.8 (46.7 in November). Five-month high.
Flash Eurozone Manufacturing PMI(3) at 46.3 (46.2 in November). Nine-month high.
Flash Eurozone Manufacturing PMI Output Index(4) at 46.1 (46.1 in November).
Data collected 05-13 December.
The Markit Eurozone PMI® Composite Output Index rose to a nine-month high in December according to the flash estimate, up for the second successive month from 46.5 in November to 47.3. However, while the PMI suggests that the downturn may have reached its strongest back in October, the survey continues to signal a steep overall rate of decline, with business activity levels having now fallen in 15 of the past 16 months.
Markit (Flash) Eurozone PMI and GDP
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2012
-3.0
-2.0
-1.0
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1.0
2.0
PMI GDP
PMI Output Index, sa, 50 = no change
Source: Markit, Eurostat. GDP = gross domestic product
GDP, %q/q
Output continued to fall in manufacturing and services, though in both cases the rate of decline showed signs of moderating. Although goods production fell at a pace unchanged on November, the previous month’s decline was the smallest for seven months. The rate of decline in service sector activity meanwhile eased to its weakest since July.
Output rose for the first time in eight months in Germany, though the increase was only very modest as an upturn in the service sector was offset by a faster decline in manufacturing production.
Output fell for the tenth month in a row in France, with the rate of decline remaining steep despite easing to the slowest since August. Elsewhere in the Eurozone output fell sharply, although the average rate of decline was the weakest since March.
Ongoing steep fall in new business The rate of decline of new business also moderated, slowing for the third month in a row. The easing was only very marginal, however, indicating that companies continued to face steeply deteriorating demand for goods and services.
Manufacturing new orders fell at a strong rate that held broadly stable since November. That was despite new export orders falling at the weakest pace for nine months. Total new orders in the goods-producing sector have now fallen for 19 successive months. Service sector new business inflows also fell, declining for the fifteenth straight month – albeit at the slowest rate since June.
Core v. Periphery PMI Output Indices
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GermanyFranceRest of Eurozone
Composite Output, sa, 50 = no change on previous month
Source: Markit
Page 2 of 4 © Markit Economics Limited 2012
Further payroll cuts The rate of job losses slowed in December, hitting the lowest since August. That said, it remained steep by the historical standards of the survey as companies adjusted capacity in line with the ongoing loss of orders. Overall employment levels have now fallen for 12 consecutive months while backlogs of work have declined for 18 months in a row.
Both manufacturing and services saw similar rates of job losses. By country, a stabilisation of headcounts in Germany contrasted with falling employment in France and elsewhere across the Eurozone on average.
Core v. Periphery PMI Employment Indices
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GermanyFranceRest of Eurozone
Composite Employment sa, 50 = no change on previous month
Source: Markit
Muted prices pressures Inflationary pressures meanwhile remained muted, largely reflecting the need for firms to compete on price in the face of the ongoing broad-based weakness of demand. Prices charged fell at the fastest rate for three months, reflecting discounting by service providers. In contrast, manufacturers’ selling prices were unchanged on average, having fallen during the previous six months.
Input prices rose at a slightly stronger rate, but the rate of increase has shown little overall change over the past four months and remained below the
survey’s long-run average. Service providers reported a faster rate of input cost inflation than manufacturers.
Expectations pick up Finally, looking ahead, business expectations for the forthcoming year (measured only in the service sector) rose for the second successive month to reach a four-month high. Confidence nevertheless remained low by the historical standards of the survey, lower than at any time prior to the 2008-09 financial crisis.
Optimism jumped to a seven-month high in Germany and edged up to a four-month peak in France, but fell back slightly elsewhere across the Eurozone. Commenting on the flash PMI data, Chris Williamson, Chief Economist at Markit said:
“The eurozone downturn showed further signs of easing in December, adding to hopes that the outlook for next year is brightening. It looks like the downturn reached its fiercest back in October, since when the PMI has turned up steadily by no means spectacularly.
“The survey is still consistent with euro area GDP falling for the third successive quarter and, as the official data lag the PMI, the downturn is likely to have steepened compared with the 0.1% decline seen in the third quarter. However, a return to growth is looking like an increasing possibility in the first half of next year, barring any surprises, if the recent improvements in the survey data can be sustained.
“The turnaround is being led by Germany, for which the PMI has already returned to positive territory. However, the rates of decline in France and the rest of the region remain worryingly severe.”
-Ends-
Page 3 of 4 © Markit Economics Limited 2012
Summary of December data Output Composite Output falls for eleventh
month running, but at slowest pace since March (47.3).
Services Activity falls at weakest rate since July.
Manufacturing Production declines at unchanged rate from November.
New Orders Composite New business declines for seventeenth successive month.
Services New business falls at slowest rate since June.
Manufacturing New orders continue to fall sharply.
Backlogs of Work Composite Slowest decline in backlogs in four months.
Services Eighteenth successive monthly decline.
Manufacturing Backlogs fall at slowest rate since May.
Employment Composite Jobs decline for twelfth month running, but at slower rate.
Services Jobs shed further, at stronger rate than 2012 average.
Manufacturing Employment declines at broadly similar rate to November.
Input Prices Composite Input price inflation broadly in line with 2012 average.
Services Input price inflation at three-month high.
Manufacturing Input prices rise for fourth consecutive month.
Output Prices Composite Output prices fall for ninth month running, fastest rate since September.
Services Charges down for thirteenth month running.
Manufacturing Output prices unchanged since November.
PMI(3) Manufacturing PMI below 50.0 for seventeenth month running, but improves to nine-month high of 46.3.
Output
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Composite Manufacturing Services
Eurozone PMIs - Output
New business
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Composite Manufacturing Services
Eurozone PMIs - New Business
Employment
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Composite Manufacturing Services
Eurozone PMIs - Employment
Input prices
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Composite Manufacturing Services
Eurozone PMIs - Input Prices
Output prices
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Composite Manufacturing Services
Eurozone PMIs - Output Prices
Source: Markit.
Page 4 of 4 © Markit Economics Limited 2012
For further information, please contact:
Markit Chris Williamson, Chief Economist Rob Dobson, Senior Economist Telephone +44-20-7260-2329 Telephone +44-1491-461-095 Mobile +44-779-555-5061 Mobile +44-782-691-3863 Email [email protected] Email [email protected]
Caroline Lumley, Corporate Communications Telephone +44-20-7260-2047 Mobile +44-78-1581-2162 Email [email protected]
Note to Editors: Final December data are published on 2 January for manufacturing and 4 January for services and composite indicators.
The Eurozone PMI® (Purchasing Managers' Index®) is produced by Markit and is based on original survey data collected from a representative panel of around 5,000 companies based in the euro area manufacturing and service sectors. National manufacturing data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. National services data are included for Germany, France, Italy, Spain and the Republic of Ireland. The flash estimate is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data.
The average differences between the flash and final PMI index values (final minus flash) since comparisons were first available in January 2006 are as follows (differences in absolute terms provide the better indication of true variation while average differences provide a better indication of any bias):
Average Average difference Index difference in absolute terms Eurozone Composite Output Index1 0.0 0.2 Eurozone Manufacturing PMI3 0.0 0.2 Eurozone Services Business Activity Index2 0.1 0.3
The Purchasing Managers’ Index® (PMI®) survey methodology 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.
Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, first published seasonally adjusted series and subsequently revised data are available to subscribers from Markit. Please contact [email protected].
Notes 1. The Composite Output PMI is a weighted average of the Manufacturing Output Index and the Services Business Activity Index. 2. The Services Business Activity Index is the direct equivalent of the Manufacturing Output Index, based on the survey question “Is the level of business activity at your company higher,
the same or lower than one month ago?” 3. The Manufacturing PMI is a composite index based on a weighted combination of the following five survey variables (weights shown in brackets): new orders (0.3); output (0.25);
employment (0.2); suppliers’ delivery times (0.15); stocks of materials purchased (0.1). The delivery times index is inverted. 4. The Manufacturing Output Index is based on the survey question “Is the level of production/output at your company higher, the same or lower than one month ago?”
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The intellectual property rights to the Flash Eurozone PMI® provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index® and PMI® are registered trade marks of Markit Economics Limited. Markit and the Markit logo are registered trade marks of Markit Group Limited.