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Nov 23, 2016 - Flash Eurozone Services PMI Activity Index(2) at 54.1 (52.8 in .... Services. New business increases at f
News Release

Purchasing Managers’ Index® MARKET SENSITIVE INFORMATION EMBARGOED UNTIL 1000 (CET) / 0900 (UTC) November 23 2016

Markit Flash Eurozone PMI

®

Eurozone PMI signals strongest growth so far this year Key findings: (1) Flash Eurozone PMI Composite Output Index at 54.1 (53.3 in October). 11-month high.

Markit Eurozone PMI and GDP

   

Flash Eurozone Services PMI Activity Index at 54.1 (52.8 in October). 11-month high.

(2)

Flash Eurozone Manufacturing PMI Output (4) Index at 54.1 (54.6 in October). Two-month low. Flash Eurozone Manufacturing PMI (53.5 in October). 34-month high.

(3)

at 53.7

Data collected November 11-22

The pace of economic growth in the eurozone accelerated to the fastest so far this year in November. Rising order books meanwhile prompted firms to take on extra staff at the jointfastest rate since early-2008, and prices charged inched higher, indicating that inflationary pressures are at their highest for over five years. The preliminary ‘flash’ Markit Eurozone PMI, based on approximately 85% of final survey replies, rose to 54.1, up from 53.3 in October. The latest reading signalled the strongest monthly increase in output since last December. Identical rates of expansion were seen across both the manufacturing and service sectors, with the latter seeing the best expansion for 11 months. Although manufacturing output growth eased slightly, the rise was still the second-largest in 2016 so far. New order inflows also showed the largest monthly improvement since last December, with the rate of growth accelerating for the third month running. The influx of new work helped cause backlogs of uncompleted orders to rise at the fastest rate since May 2011. With

firms’

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outstanding

order

book

volumes

accumulating to the greatest extent in five-and-ahalf years, companies took on more staff to help raise operating capacity. Employment growth strengthened for the second month running to reach the joint-highest pace since February 2008. Average prices charged by companies for their goods and services meanwhile rose for the first time since August of last year, led by price rises in the manufacturing sector. Furthermore, although only marginal, the price increase was all the more notable for being the largest since August 2011. Increased prices commonly reflected the need to pass higher costs on to customers to protect margins. Average input costs showed the largest monthly rise for one-and-a-half years. In manufacturing, the rise in input costs was the sharpest for over four-and-a-half years.

German-led growth Germany saw another strong performance, with the rate of business activity growth dipping slightly but remaining well above the recent low seen in September. German service providers reported the fastest expansion since May, but growth slowed in manufacturing, albeit remaining robust thanks

© IHS Markit 2016

News Release

Core v. Periphery PMI Output Indices

largely to improved export sales. Growth meanwhile picked up in France to show the second-best expansion over the past year, with both new orders and employment showing the largest gains for almost one-and-a-half years. Services led the expansion, though manufacturing also continued to improve on the back of rising exports. Elsewhere in the eurozone, growth of business activity accelerated markedly to a ten-month high, with new orders and employment likewise recording stronger rates of increase.

Core v. Periphery PMI Employment Indices

Comment Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: “The preliminary PMI results for November indicate the sharpest monthly increase in business activity so far this year, with plenty of signs that growth will continue to accelerate. “The PMI readings so far for the fourth quarter point to GDP expanding 0.4%, led by a rebound in German growth to 0.5%. France is also seen to be enjoying its best spell since the start of the year, with the PMIs signalling GDP growth of 0.2-0.3% in the fourth quarter. “What’s especially encouraging to see is the buildup of uncompleted orders, which showed the largest rise since May 2011. Increasing numbers of firms are boosting capacity as a result of the order book backlog, leading to the joint-largest increase in employment seen this side of the global financial crisis. “ECB policymakers will also be pleased to see inflationary pressures are intensifying steadily. Average prices charged for good and services showed the biggest rise for over five years, albeit with the rate of increase being very modest. However, with indicators such as rising backlogs of work and longer supplier delivery times suggesting demand is exceeding supply, price pressures look set to intensify further in coming months.” -Ends-

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© IHS Markit 2016

News Release

Output

Summary of November data Output

New Orders

Composite

Strongest rise in output since December 2015.

Services

Services expansion at 11month high.

Manufacturing

Output growth remains solid.

Composite

New business growth strongest in 2016 to date.

Services

New business increases at fastest rate in ten months.

Manufacturing

New order growth at 33-month high.

Backlogs of Work Composite

Employment

Input Prices

Output Prices

PMI(3)

New business

Backlogs rise at strongest rate since May 2011.

Services

Outstanding business increases at fastest pace in five-and-a-half years.

Manufacturing

Backlogs rise at strongest rate since January 2014.

Composite

Jobs growth at four-month high.

Services

Fastest rate of job creation since July.

Manufacturing

Employment growth remains solid.

Composite

Input price inflation at 18month high.

Services

Input price inflation unchanged from October.

Manufacturing

Fastest increase in purchasing costs since March 2012.

Composite

Charges increase for first time since August 2015.

Services

Charges unchanged since October.

Manufacturing

Output prices increase at strongest rate since December 2013.

Manufacturing

PMI rises to 53.7, from 53.5 in October.

Employment

Input prices

Output prices

Source: IHS Markit.

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© 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 [email protected]

Rob Dobson, Senior Economist Telephone +44-1491-461-095 Mobile +44-782-691-3863 Email [email protected]

Joanna Vickers, Corporate Communications Telephone +44207 260 2234 E-mail [email protected] Note to Editors: Final November data are published on December 1 for manufacturing and December 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 [email protected]. 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?”

About IHS Markit (www.ihsmarkit.com) IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and expertise to forge solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth. IHS Markit is a registered trademark of IHS Markit Ltd. All other company and product names may be trademarks of their respective owners © 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. If you prefer not to receive news releases from IHS Markit, please email [email protected]. To read our privacy policy, click here.

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