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Published by: economicdelusion on Jan 06, 2013
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News Release
Purchasing Managers’ Index
EMBARGOED UNTIL: 09:00 (UK Time) 4 January 2013
Markit Eurozone Composite PMI
– final data
Includes Markit Eurozone Services PMI
Eurozone downturn eases at the end of 2012. Germany returns togrowth, but recessions continue in France, Italy and Spain
 Final Eurozone Composite Output Index:
 (Flash 47.3, November 46.5) 
 Final Eurozone Services Business Activity Index:
(Flash 47.8, November 46.7) The Eurozone downturn eased further at the end ofthe 2012, as rates of contraction in economic outputand new business slowed. At a nine-month high of47.2 in December, the
Markit Eurozone
 Composite Output Index
was nonetheless weakerthan the earlier flash estimate and below the 50.0no-change mark for the eleventh successive month.The average reading for the headline index over Q4as a whole (46.5) was little changed from thoserecorded in Q3 (46.3) and Q2 (46.4), and below theannual average (47.2).December saw output continue to fall in both the
sectors. Manufacturingremained the weaker performer, with productionfalling for the tenth straight month in tandem withweak demand from both domestic and exportmarkets. Service providers reported a drop inbusiness activity for the eleventh month in a row,although the rate of contraction eased to theslowest since July 2012.There was a welcome return to growth forGermany, where a solid expansion of servicesactivity offset ongoing contraction at manufacturers.Ireland continued to report a marked rate ofexpansion. France, Italy and Spain all remained inrecession, but there was at least some brighternews from these nations, with rates of contractioneasing in all three in December.
Nations ranked by all-sector output growth (Dec.)
Ireland 54.2 3-month lowGermany 50.3 8-month highItaly 45.7 11-month highFrance 44.6 4-month highSpain 43.9 9-month high
Markit Eurozone PMI and GDP
        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
PMI Output Index, sa, 50 = no change
Source: Markit, Eurostat. GDP = gross domestic product 
GDP, %q/q
Chris Williamson, Chief Economist at Markit
“The PMI surveys provide some hope that the Eurozone is showing signs of lifting out of its deep double-dip recession. The surveys rose to multi- month highs in all four of the largest euro member countries, suggesting that rates of decline eased in France, Italy and Spain while the economic situation stabilised in Germany.“But the improvements in December are unlikely to prevent the Eurozone economy having contracted at a sharper rate in the fourth quarter, and strong growth disparities are likely to persist for some time.However, the surveys at least bring some substance to the belief that the worst is over and that a return to growth is in sight for the region in 2013.” 
Page 1 of 4
 © Markit Economics Limited 2013
Services and manufacturing combined:
Market conditions remained subdued at the end of2012, with the level of
incoming new business
 contracting for the seventeenth straight month.Declines were reported by both manufacturers andservice providers.Ireland was the only nation to report an increase innew orders, although rates of reduction did ease inGermany and Spain. In a worrying development,the rate of decline in France and Italy bothaccelerated, to the sharpest since March 2009 andJuly 2012 respectively, which may put furtherpressure on the trend in headline activity in comingmonths.Weak demand continued to result in available sparecapacity in the Eurozone private sector, reflected ina further marked decrease in
backlogs of work
.However, the rate of depletion in outstandingbusiness eased to its slowest since August.Further
job losses
were implemented duringDecember, with both manufacturers and serviceproviders reporting further cuts to payroll numbers.In contrast to the broader trend, Ireland continuedto report solid job creation in December. Therewere also signs of the German labour marketstabilising, as a modest increase in service sectorpayrolls offset further jobs cuts at manufacturers.Employment fell again in France, Italy and Spain,with rates of loss broadly similar to November.Inflationary pressures remained muted overall atthe end of 2012, mainly due to companies needingto remain price competitive in the face of lacklustredemand.
Prices charged
fell for the ninth monthrunning in December. Price discounting was seenin the service sector, whereas factory gate priceswere unchanged. However, the combined rate ofdecline in output prices over Q4 2012 as a wholewas less marked than in the prior quarter.Average
input costs
rose at a slightly sharper pacein December, with rates of increase edging higherin each of the big-four economies. Input prices rosein both the Eurozone manufacturing and servicesectors, with the steeper inflation signalled byservice providers.
 The Eurozone service sector contracted for theeleventh consecutive month in December, as levelsof incoming new business continued to decline.At a five-month high of 47.8, up from 46.7 inNovember, the Markit
Eurozone ServicesBusiness Activity Index
was unchanged from theearlier flash estimate and consistent with a solidreduction in output.The weakness was centred on France, Italy andSpain – all of which reported lower levels of output – although rates of decline did ease in the lattertwo. In contrast, business activity rose in Germanyfor the first time since July, while growth wasrecorded in Ireland for the fifth successive month.The level of incoming
new business
contracted forthe sixteenth successive month in December. Therate of decline in new order inflows was still abovethe average for this sequence, despite easing to asix-month low in the latest survey period. Newbusiness declined in France, Italy and Spain, rosestrongly in Ireland and edged back into growthterritory in Germany.Spare capacity remained available in the sectorduring December, as
backlogs of work
Job losses
have also been reported ineach month of 2012, with December seeing furthercuts implemented in France, Italy and Spain.Germany saw a modest increase in employment forthe second time in the past three months (meaningpayroll numbers stabilised over Q4 2012 as awhole) and there was solid job creation in Ireland.
Input price inflation
accelerated to a nine-monthhigh in December, reflecting higher costs forenergy, staffing and transportation. In contrast,average
service charges
declined at the fastestpace in three months. Germany was again the onlynation to report an increase in selling prices.
regarding output levels in one year’stime remained subdued at the end of 2012, despiterising to a four-month high in December. Thedegree of positive sentiment improved in Franceand Spain, while optimism declined over the monthin Italy and Ireland. German service providersreported a neutral outlook for the year ahead.
Page 2 of 4
 © Markit Economics Limited 2013
PMI and GDP comparisons:France Italy
        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
PMI Output / Business Activity sa, 50 = no change
Source: Markit, ISTAT GDP = gross domestic product 
GDP, %q/q
        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
PMI Output / Business Activity sa, 50 = no change
Source: Markit, INSEE GDP = gross domestic product 
GDP, %q/q
        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
PMI Output / Business Activity sa, 50 = no change
Source: Markit, FSO. GDP = gross domestic product 
GDP, %q/q
        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
PMI Output / Business Activity sa, 50 = no change
Source: Markit, INE. GDP = gross domestic product 
GDP, %q/q
Page 3 of 4
 © Markit Economics Limited 2013

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