News Release
Purchasing Managers’ Index®
MARKET SENSITIVE INFORMATION
EMBARGOED UNTIL 1000 (CEST) / 0800 (UTC) August 23 2016
Markit Flash Eurozone PMI
®
Eurozone Flash PMI edges up to seven-month high
Key findings:
(1)
Flash Eurozone PMI Composite Output Index
at 53.3 (53.2 in July). 7-month high.
Markit Eurozone PMI and GDP




Flash Eurozone Services PMI Activity Index
at 53.1 (52.9 in July). 3-month high.
Flash Eurozone Manufacturing PMI
(52.0 in July). 3-month low.
(3)
(2)
at 51.8
Flash Eurozone Manufacturing PMI Output
(4)
Index at 54.0 (53.9 in July). 8-month high.
Data collected August 12-22
The euro area economy continued to expand at a
steady pace in August. At 53.3, up from 53.2 in
July, the flash estimate of the Markit Eurozone
®
PMI inched up to a seven-month high. With the
index only slightly above the average seen
throughout the year to date, growth in the third
quarter is likely to be similar to that seen in the first
half of the year.
A slowing in manufacturing order book growth and
a dip in services optimism led to a weakened rate of
hiring and suggested that growth could fade in
coming months, however. Inflationary pressures
meanwhile remained muted.
The August survey saw growth of output accelerate
marginally in both manufacturing and services, with
the former recording the slightly stronger pace of
expansion.
Greater variation was seen in terms of order books,
however, where manufacturing saw a slowing in
demand. Whereas inflows of new business in the
service sector rose at the fastest rate for four
months, new orders received by factories grew at
the slowest rate for one-and-a-half years.
Manufacturers worked down their inventories in the
face of weaker demand growth, with warehouse
stocks of finished goods falling at the fastest rate
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for six years.
The future strength of demand in the service sector
was meanwhile called into question as business
expectations about the year ahead among service
providers fell to its lowest since December 2014.
There were also signs that the strongest spell of job
creation seen in the region over the past five years
may be cooling. Although employment rose again in
August, the rate of increase slowed to a threemonth low, hit by weaker hiring trends in both
manufacturing and services.
Inflationary pressures remained muted. Although
input costs rose for the fifth month in a row, the rise
was the smallest since April. Average selling prices
meanwhile fell again, dropping at a slightly greater
rate than July, continuing the trend of falling prices
seen over much of the past five years.
By country, an upturn in the rate of growth to the
highest since last October put France on course for
its best quarter of growth so far this year. France
nevertheless continued to trail behind Germany in
terms of the overall pace of expansion, despite the
latter seeing growth falter from July’s seven-month
high. German expansion in the third quarter so far
© IHS Markit 2016
News Release
is running slightly ahead of the pace seen over the
first half of the year, acting as a key engine of the
eurozone’s overall expansion.
Core v. Periphery PMI Output Indices
The rest of the eurozone excluding Germany and
France registered further robust overall growth in
August, albeit at one of the weakest rates of
expansion seen over the past year-and-a-half.
Comment
Commenting on the flash PMI data, Chris
Williamson, Chief Business Economist at IHS
Markit said:
“The August flash PMI indicates that the eurozone
remains on a steady growth path in the third
quarter, with no signs of the recovery being derailed
by ‘Brexit’ uncertainty.
Core v. Periphery PMI Employment Indices
“The survey data are consistent with the region’s
GDP growing at a quarterly rate of 0.3% in the third
quarter, or 1.2% annualised, which is similar to that
seen on average over the first half of the year.
“A solid 0.5% pace of expansion in Germany is
being accompanied by a return to modest growth in
France in the third quarter, while the rest of the
region is also seeing growth pick up after slowing in
the second quarter.
“While the resilience of the PMI in August will add
to the belief that the ECB will see no need for any
immediate further stimulus, the weakness of the
overall pace of expansion and disappointing trends
in hiring, order books, business optimism and
prices all suggest that policymakers will keep the
door open for more stimulus later in the year.”
-Ends-
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© IHS Markit 2016
News Release
Output
Summary of August data
Output
New Orders
Composite
Strongest rise in output
since January.
Services
Services expansion at threemonth high.
Manufacturing
Output growth at eight-month
high.
Composite
New business growth littlechanged from July.
Services
New business increases at
fastest rate in four months.
Manufacturing
New order growth eases to 18month low.
Backlogs of Work Composite
Employment
Input Prices
Output Prices
PMI(3)
New business
Backlogs rise marginally.
Services
Outstanding business
increases fractionally.
Manufacturing
Backlogs rise at strongest rate
in eight months.
Composite
Jobs growth weakens to
three-month low.
Services
Slowest job creation since May.
Manufacturing
Employment rises at slowest
rate in five months.
Composite
Input price inflation hits fourmonth low.
Services
Slowest increase in costs since
April.
Manufacturing
Input prices rise for second
month running.
Composite
Charges fall for eleventh
consecutive month.
Services
Charges broadly unchanged.
Manufacturing
Output prices drop at fastest
rate in four months.
Manufacturing
PMI declines to 51.8, from 52.0
in July.
Employment
Input prices
Output prices
Source: IHS Markit.
Page 3 of 4
© IHS Markit 2016
News Release
For further information, please contact:
IHS Markit
Chris Williamson, Chief Business Economist
Telephone +44-20-7260-2329
Mobile +44-779-555-5061
Email chris.williamson@ihsmarkit.com
Rob Dobson, Senior Economist
Telephone +44-1491-461-095
Mobile +44-782-691-3863
Email rob.dobson@ihsmarkit.com
Joanna Vickers, Corporate Communications
Telephone +44207 260 2234
E-mail joanna.vickers@ihsmarkit.com
Note to Editors:
Final August data are published on September 1 for manufacturing and September 5 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):
Index
Eurozone Composite Output Index1
Eurozone Manufacturing PMI3
Eurozone Services Business Activity Index2
Average
difference
0.0
0.0
0.1
Average difference
in absolute terms
0.2
0.2
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
economics@markit.com.
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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IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive
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© 2016 IHS Markit Ltd. All rights reserved.
About PMI
Purchasing Managers’ Index® (PMI®) surveys are now available for over 30 countries and also for key regions including the eurozone. They
are the most closely-watched business surveys in the world, favoured by central banks, financial markets and business decision makers for
their ability to provide up-to-date, accurate and often unique monthly indicators of economic trends. To learn more go to
www.markit.com/product/pmi.
The intellectual property rights to the Flash Eurozone PMI® provided herein are owned by or licensed to IHS Markit. Any unauthorised use, including
but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without IHS Markit’s prior consent. IHS
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 IHS Markit be liable for any special, incidental, or
consequential damages, arising out of the use of the data. Purchasing Managers' Index ® and PMI® are either registered trade marks of Markit
Economics Limited or licensed to Markit Economics Limited. IHS Markit is a registered trademark of IHS Markit Ltd.
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© IHS Markit 2016