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© Markit Economics Limited 2012
News Release
Purchasing Managers’ Index
®
MARKET SENSITIVE INFORMATION
EMBARGOED UNTIL: 09:00 (UK Time) 5 December 2012
Markit Eurozone Composite PMI
®
– final data
Includes Markit Eurozone Services PMI
®
Eurozone downturn continues in November, as economic activity falls across the big-four nations
Final Eurozone Composite Output Index:
46.5
(Flash 45.8, October 45.7)
Final Eurozone Services Business Activity Index:
46.7
(Flash 45.7, October 46.0) The
Markit Eurozone
PMI
®
Composite Output Index
rose to 46.5 in November, up from October’s 40-month low of 45.7 and above the earlier flash estimate of 45.8. The headline index has now remained below the neutral 50.0 mark for ten consecutive months and, although the latest reading was the highest since July, it was nonetheless indicative of a solid contraction in overall private sector output. The average reading so far in Q4 is the weakest since the second quarter of 2009. Downturns continued in both the
manufacturing
and
service
sectors in November. However, rates of contraction slowed to seven- and three-month lows respectively. Both sectors were affected by weak demand from domestic and export markets.
Ireland
was the only nation to report an increase in business activity during November, with the rate of expansion broadly unchanged on October’s 20-month peak. In contrast,
France
,
Italy
and
Spain
remained in deep contraction territory, despite rates of decline moderating in France and Spain. The downturn in
Germany
also eased, with output continuing to decline at a considerably weaker rate than in other large nations.
Nations ranked by all-sector output growth (Nov.)
Ireland 55.3 2-month low Germany 49.2 2-month high Italy 44.4 3-month low France 44.3 3-month high Spain 43.4 3-month high
Markit 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
Comment:
Chris Williamson, Chief Economist at Markit
said:
“The eurozone’s recession looks to have deepened in the final quarter, with GDP likely to have fallen by considerably more than the modest 0.1% decline seen in the third quarter. France, Spain and Italy continue to see strong contractions, while a milder downturn is evident in Germany. “There are signs that the recession may have reached a nadir, however, at least in terms of the rate of decline, and it is reassuring to see that the final Eurozone PMI reading came in higher than the earlier flash estimate. Services in particular surprised to the upside, contracting to the least extent for three months, while manufacturing output fell at the slowest rate for seven months.
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© Markit Economics Limited 2012
“Despite the easing in the rate of decline, the region sill looks set for further contraction in the early months of 2013, as weak consumer demand in many countries combines with low levels of business confidence and falling global trade.”
Services and manufacturing combined:
The level of incoming
new business
contracted for the sixteenth month in a row during November. The rate of decline was solid, as has been the case through much of the year-to-date, though eased to a five-month low and was less marked than indicated by the earlier flash estimate. Signs of excess capacity and ongoing cost-cutting led to further job losses in November.
Employment
fell for the eleventh successive month and to a broadly similar extent to October. The steepest reduction in payroll numbers was reported in Spain, albeit less marked than October, while the rate of job losses in Italy accelerated to the fastest in almost three-and-a-half years. The rate of reduction eased in France, while Germany reported only a slight decline in staffing levels and Ireland saw further solid jobs growth.
Backlogs of work
declined for the seventeenth consecutive month in November, with marked reductions signalled at both manufacturers and service providers. Only Ireland reported an increase, while substantial depletions in backlogs of work were signalled in each of the big-four nations.
Average input prices
rose at the slowest pace for three months in November, as upward cost pressures moderated slightly at both manufacturers and service providers.
Prices charged
for goods and services both continued to fall, however, with the sharper decline reported by service providers. Steep price discounting was reported by Spain, while France, Italy and Ireland all saw further modest reductions. In contrast, German companies reported a further increase in average charges.
Services:
The Markit
Eurozone Services Business Activity Index
rose to a three-month high of 46.7 in November, up from October’s 39-month low of 46.0 and above the earlier flash estimate of 45.7. The headline index has signalled contraction in 14 out of the past 15 months, the exception being a slight expansion signalled at the start of this year. The main drags on the Eurozone headline figure remained France, Italy and Spain. However, while rates of contraction in France and Spain eased to three-month lows, Italy reported a steeper downturn in activity than one month earlier. Ireland reported a further solid expansion of business activity, while the rate of contraction in Germany eased to a marginal pace. The main factor underlying the downturn in business activity remained declining inflows of new business.
New orders
fell to a broadly similar extent as in the previous month, but to a lesser degree than signalled by the earlier flash estimate. A steep reduction in backlogs of work suggests that companies also continued to support activity levels through the depletion of pipeline work.
Payroll numbers
were reduced for the eleventh successive month in November, with the rate of job losses the second-fastest during this period. Only Ireland reported an increase in staffing levels. Steep cutbacks were reported in Italy and Spain, while the modest reduction in France at least represented an improvement on the sharper losses signalled in the prior three months. German service providers also implemented a slight reduction in employment, the second in the past three months.
Business confidence
among Eurozone service providers about levels of business activity in one year’s time remained subdued in November. This mainly reflected the trend in Germany, where service providers still expect activity to be lower 12 months’ from now. However, the final reading for the Eurozone as a whole signalled that services companies expect (on average) that activity will post a slight increase, an improvement on the modest decline indicated by the earlier flash estimate.
Average cost inflation
eased to a four-month low in November, as rates of increase moderated in all of the nations covered except France. However, strong competition and weak demand continued to erode pricing power, as highlighted by
average
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© Markit Economics Limited 2012
service charges
dropping for the twelfth straight month. Substantial price discounts were reported in Spain, while comparatively modest reductions were signalled in France, Italy and Ireland. In contrast, German service providers raised their charges for the second month in a row.
PMI and GDP comparisons: France
32384450566268
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
-2.0-1.00.01.02.0
PMIGDP
PMI Output / Business Activity sa, 50 = no change
Source: Markit, INSEE GDP = gross domestic product
GDP, %q/q
Germany
25303540455055606570
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
-4.0-3.0-2.0-1.00.01.02.03.0
PMIGDP
PMI Output / Business Activity sa, 50 = no change
Source: Markit, FSO. GDP = gross domestic product
GDP, %q/q
Italy
3035404550556065
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 / Business Activity sa, 50 = no change
Source: Markit, ISTAT GDP = gross domestic product
GDP, %q/q
Spain
253035404550556065
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
-2.0-1.5-1.0-0.50.00.51.01.5
PMIGDP
PMI Output / Business Activity sa, 50 = no change
Source: Markit, INE. GDP = gross domestic product
GDP, %q/q
-Ends-