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EuroZone Flash PMI Nov2012

EuroZone Flash PMI Nov2012

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Published by: economicdelusion on Nov 22, 2012
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12/04/2012

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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) 22 November 2012
Markit Flash Eurozone PMI
 ® 
 
Eurozone sees ongoing steep decline as services suffers worst month since mid-2009
 Flash Eurozone PMI Composite Output Index
(1)
at45.8 (45.7 in October). Two-month high.
 Flash Eurozone Services PMI Activity Index
(2)
at45.7 (46.0 in October). 40-month low.
 Flash Eurozone Manufacturing PMI
(3)
at 46.2(45.4 in October). Eight-month high.
 Flash Eurozone Manufacturing PMI Output Index
(4)
 at 45.9 (45.0 in October). Two-month high.
Data collected 12-21 November.
The
Markit Eurozone PMI
 ® 
Composite OutputIndex
was little-changed in November accordingthe flash estimate, up fractionally from 45.7 inOctober to 45.8. October’s reading had been thelowest since June 2009 and, for the fourth quarterof 2012 so far, PMI data suggest the strongestcontraction of output since the second quarter of2009.
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
 
Activity has now fallen in 14 of the last 15 months,with the exception being a marginal increase seenin January. Output fell sharply in both themanufacturing and service sectors and, while theformer saw the rate of contraction ease slightly, thelatter saw business activity fall at a rate not seensince July 2009.By country, the rates of decline in output eased inboth France and Germany but remainedsubstantial, notably in France. Elsewhere in theregion, the average rate of decline reaccelerated,hitting the fastest pace since July.
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 ongoing drop in output reflected a further steepdeterioration in
new business
, which fell at one ofthe fastest rates seen since mid-2009. A sharperrate of decline in the services sector was partlyoffset by manufacturers reporting that their rate ofloss of new orders had eased slightly to theweakest for eight months.The plight of the service sector was also highlightedby companies’ expectations for activity in the yearahead dropping to the lowest since March 2009.Sentiment dropped especially sharply in Germany,but improved slightly in France.Forward-looking indicators in the manufacturingsector also pointed to ongoing weakness in thecoming months. The amount of goods purchasedfor use in production fell steeply, causing stocks ofpurchases to contract at the same pace as thenear-three year record seen in October. Companiesalso sought to run down their inventories of finishedgoods, which showed the largest monthly fall sinceAugust 2010.
Employment
fell across the region for the eleventhsuccessive month, with the rate of job lossesrunning at the second-fastest since January 2010as firms sought to reduce costs in the face of weak
 
 
Page 2 of 4
 
 © Markit Economics Limited 2012
 
demand and an uncertain outlook. The rate ofdecline steepened in services but eased inmanufacturing.Job cutting also spread geographically. Germanemployment dropped at the fastest rate sinceJanuary 2010, while the rate of job losses in theperiphery was the fastest since July. Job lossesalso continued to be reported in France, albeit tothe weakest degree since June.
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 joint-fastest rate since July 2009. Ongoing steeprates of decline in both manufacturing and servicespoint to the strong possibility of further job sheddingin December, as companies seek to reducecapacity in line with order books.
Input costs
across both sectors continued to rise inNovember, albeit at the weakest rate for threemonths.
Prices charged
for goods and servicesboth continued to fall, however, with serviceproviders reporting by far the steeper rate ofdecline, linked in many cases to the need to offerdiscounts in the face of sluggish demand.
 
Commenting on the flash PMI data,
ChrisWilliamson, Chief Economist at Markit
said:
“The eurozone economy continued to deteriorate at an alarming pace in November, and is entrenched in the steepest downturn since mid-2009.“Officially, the region saw only a very modest slide back into recession in the third quarter, with GDP falling by a mere 0.1%, but the PMI suggests that the downturn is set to gather pace significantly in the fourth quarter. The final three months of the year could see GDP fall by as much as 0.5%.“While it is reassuring to have seen signs of stabilisation in some survey indicators, the overall rate of decline remains severe and has spread to encompass Germany, suggesting the situation could deteriorate further in the coming months. With  jobs being cut at the second-fastest rate since January 2010 and expectations for the year ahead in the services sector slumping to the lowest since March 2009, firms have clearly become increasingly anxious about the economic outlook and are seeking to control costs as much as possible. All this suggests that any swift return to growth is unlikely.” 
-Ends-
 
 
Page 3 of 4
 
 © Markit Economics Limited 2012
 Summary of November data
 
Output
 
Composite Output falls for tenth monthrunning, at broadly similarpace to October (45.8).
Services Activity falls at fastest ratesince July 2009.Manufacturing Production declines at slightlyweaker rate than in October.
New Orders
 
Composite New business declines forsixteenth successive month.
Services New business falls at second-fastest rate in over three years.Manufacturing New orders fall at weakest ratesince March.
Backlogs of Work
 
Composite Outstanding businesscontinues to decline sharply.
Services Seventeenth successivemonthly decline.Manufacturing Backlogs fall at slowest ratesince May.
Employment
 
Composite Jobs decline for eleventhmonth running.
Services Second-fastest rate of jobshedding since November2009.Manufacturing Employment declines atweaker rate than in October.
Input Prices
 
Composite Input price inflation easesfurther.
Services Input price inflation eases tofive-month low.Manufacturing Input price inflation at three-month low.
Output Prices
 
Composite Output prices fall for eighthmonth running.
Services Charges down for twelfthmonth running.Manufacturing Output prices fall for sixthstraight month, albeit marginally.
PMI
(3)
Manufacturing PMI below 50.0 for sixteenthmonth running, but improves toeight-month high of 46.2.
Output
3035404550556065
199819992000200120022003200420052006200720082009201020112012
CompositeManufacturingServicesEurozone PMIs - Output
 
New business
253035404550556065
199819992000200120022003200420052006200720082009201020112012
CompositeManufacturingServicesEurozone PMIs - New Business
 
Employment
3035404550556065
199819992000200120022003200420052006200720082009201020112012
CompositeManufacturingServicesEurozone PMIs - Employment
 
Input prices
2030405060708090
199819992000200120022003200420052006200720082009201020112012
CompositeManufacturingServicesEurozone PMIs - Input Prices
 
Output prices
3035404550556065
199819992000200120022003200420052006200720082009201020112012
CompositeManufacturingServicesEurozone PMIs - Output Prices
 
Source: Markit.

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