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EZ Flash PMI Sept 2012

EZ Flash PMI Sept 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) 20 September 2012
Markit Flash Eurozone PMI
 ® 
 
Eurozone sees steepest contraction since June 2009 despite downturneasing in Germany
 Flash Eurozone PMI Composite Output Index
(1)
at45.9 (46.3 in August). 39-month low.
 Flash Eurozone Services PMI Activity Index
(2)
at46.0 (47.2 in August). 38-month low.
 Flash Eurozone Manufacturing PMI
(3)
at 46.0(45.1 in August). Six-month high.
 Flash Eurozone Manufacturing PMI Output Index
(4)
 at 45.5 (44.4 in August). Five-month high.
Data collected 12-19 September.
The
Markit Eurozone PMI
 ® 
Composite OutputIndex
fell from 46.3 in August to 45.9 in September,according to the preliminary ‘flash’ reading, based onaround 85% of usual monthly replies. The indextherefore signalled that the private sector economycontracted for the twelfth time in the past 13 months,with the rate of decline accelerating slightly to reachthe fastest since June 2009.The September reading rounds of the weakest quartersince the second quarter of 2009, with the averagePMI reading for the third quarter at 46.2, down froman average of 46.4 in the second quarter.
Markit (Flash) Eurozone PMI and GDP
3035404550556065
        1        9        9        9        2        0        0        0        2        0        0        1        2        0        0        2        2        0        0        3        2        0        0        4        2        0        0        5        2        0        0        6        2        0        0        7        2        0        0        8        2        0        0        9        2        0        1        0        2        0        1        1        2        0        1        2
-3.0-2.0-1.00.01.02.0
PMIGDP
PMI Output Index, sa, 50 = no change
Source: Markit, Eurostat. GDP = gross domestic product 
GDP, %q/q
 
Manufacturing and services saw similarly steep ratesof decline in September. However, whilemanufacturing output fell at the slowest rate sinceApril, the service sector saw the largest drop in activitysince July 2009.The faster rate of decline in output reflected anaccelerated rate of loss of new business – the largestmonthly fall since May 2009. Manufacturing andservices saw identical, steep rates of contraction, withthe decline in services the largest since June 2009.Manufacturers reported a drop of marginally greatermagnitude than in August, though new export ordersfell at a slightly slower rate.
Core v. Periphery PMI Output Indices
203040506070
        1        9        9        9        2        0        0        0        2        0        0        1        2        0        0        2        2        0        0        3        2        0        0        4        2        0        0        5        2        0        0        6        2        0        0        7        2        0        0        8        2        0        0        9        2        0        1        0        2        0        1        1        2        0        1        2
GermanyFranceRest of Eurozone
Composite Output, sa, 50 = no change on previous month
Source: Markit 
 
The falls in production and new orders werewidespread across the single currency area, althougha divergence was seen among the region’s twolargest economies.France saw output and new orders both fall at thefastest rates since April 2009, with rates of declineaccelerating markedly in both manufacturing andservices.Germany meanwhile saw the rate at which output fellease substantially to show only a modest decline, andthe weakest since output began contracting in May.The rate of loss of new orders also eased. Serviceseven saw a marginal upturn in activity for the first timesince May, though the manufacturing sector continuedto contract, led by a further sharp fall in new export
 
 
Page 2 of 4
 
 © Markit Economics Limited 2012
 
orders.Outside of France and Germany, the region sawoutput fall at the steepest rate since May 2009, withthe rate of loss of new orders also accelerating.Employment fell for the ninth consecutive monthacross the Eurozone, dropping at the fastest ratesince January 2010. The rate of job losses in serviceswas the highest since November 2009 and steeperthan the cut seen in manufacturing, which was thelowest for five months.While only a marginal fall in employment was seen inGermany, French payroll numbers were cut at thefastest rate since November 2009, and elsewhereacross the region employment showed the largestmonthly fall since July 2009.
Core v. Periphery PMI Employment Indices
203040506070
        1        9        9        9        2        0        0        0        2        0        0        1        2        0        0        2        2        0        0        3        2        0        0        4        2        0        0        5        2        0        0        6        2        0        0        7        2        0        0        8        2        0        0        9        2        0        1        0        2        0        1        1        2        0        1        2
GermanyFranceRest of Eurozone
Composite Employment sa, 50 = no change on previous month
Source: Markit 
Backlogs of orders fell across the region at the fastestrate since July 2009, falling at stronger rates in bothmanufacturing and services and suggestingemployers may seek further job cuts in Octoberunless demand revives.Service providers’ views on the 12-month outlook alsodeteriorated, becoming the most downbeat sinceMarch 2009. Steep falls in confidence were seen inboth Germany and France, with a further deteriorationalso seen across the rest of the region as a whole.The September surveys also found an increase inprice pressures. Input costs rose that the fastest ratesince April, driven higher by rising oil, fuel and foodprices in particular. Manufacturers’ input costs andselling prices both rose for the first time in fourmonths. However, although input costs in the servicesector showed the largest rise for six months, pricescharged fell at the fastest rate since February 2010,attributable to the weakness of demand.Commenting on the flash PMI data,
ChrisWilliamson, Chief Economist at Markit
said:
“The Eurozone downturn gathered further momentum in September, suggesting that the region suffered the worst quarter for three years.The flash PMI is consistent with GDP contracting by 0.6% in the third quarter and sending the region back into a technical recession.”We had hoped that the news regarding the ECB’s intervention to alleviate the debt crisis would have lifted business confidence, but instead sentiment appears to have taken a turn for the worse, with businesses the most gloomy since early-2009 due to ongoing headwinds from slower global growth.This gloom is clearly reflected in headcounts falling at the fastest rate since January 2010 as companies seek to adjust to weaker demand.“At the same time, input costs have risen markedly,linked largely to higher oil prices. Weak demand has meant companies have been unable to pass these costs on to customers, meaning output prices fell again in September. The combination of higher costs and lower selling prices will inevitably hit profit margins.“Some good news came from an easing in the rate of contraction in Germany, though the rate of decline accelerated markedly in France and a deepening downturn was also evident in the periphery. It remains too early to say, however,whether Germany will continue to buck the trend,especially as it continued to see a strong rate of loss of new orders in both manufacturing and services.” 
-Ends-
 
 
Page 3 of 4
 
 © Markit Economics Limited 2012
 Summary of September data
 
Output
 
Composite Output falls for eighth monthrunning, fastest rate sinceJune 2009 (45.9).
Services Activity falls at fastest ratesince July 2009.Manufacturing Production declines at weakestrate in five months.
New Orders
 
Composite New business declines atfastest rate since May 2009.
Services New business down forthirteenth month running.Manufacturing New orders fall for sixteenthmonth running, at broadlysimilar pace to August.
Backlogs of Work
 
Composite Outstanding business declinesat strongest rate in over threeyears.
Services Fifteenth successive monthlydecline.Manufacturing Backlogs fall at strongest ratesince July.
Employment
 
Composite Jobs decline at strongestrate since January 2010.
Services Employment declines at fastestrate since November 2009.Manufacturing Employment declines atweakest rate in four months.
Input Prices
 
Composite Input price inflation at five-month high.
Services Input price inflation at six-monthhigh.Manufacturing First rise in input prices for fourmonths.
Output Prices
 
Composite Output prices fall at weakestrate in four months.
Services Charges down for tenth monthrunning.Manufacturing First rise in output prices for fourmonths.
PMI
(3)
Manufacturing PMI below 50.0 for fourteenthmonth running, but at six-month high of 46.0.
Output
3035404550556065
199819992000200120022003200420052006200720082009201020112012
ServicesManufacturingCompositeEurozone PMIs - Output
 
New business
253035404550556065
199819992000200120022003200420052006200720082009201020112012
ServicesManufacturingCompositeEurozone PMIs - New Business
 
Employment
30354045505560
199819992000200120022003200420052006200720082009201020112012
ServicesManufacturingCompositeEurozone PMIs - Employment
 
Input prices
2030405060708090
199819992000200120022003200420052006200720082009201020112012
ServicesManufacturingCompositeEurozone PMIs - Input Prices
 
Output prices
35404550556065
199819992000200120022003200420052006200720082009201020112012
ServicesManufacturingCompositeEurozone PMIs - Output Prices
 
Source: Markit.

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