eurozone flash pmi nov2012

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Page 1 of 4 Markit Economics Limited 2012

News Release Purchasing Managers IndexMARKET 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)

at

45.8 (45.7 in October). Two-month high. Flash Eurozone Services PMI Activity Index

(2)at

45.7 (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 according

the flash estimate, up fractionally from 45.7 inOctober to 45.8. Octobers 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

30

35

40

45

50

55

60

65

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

-3.0

-2.0

-1.0

0.0

1.0

2.0

PMI GDP

PMI Output Index, sa, 50 = no c hange

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, the

latter 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 remained

substantial, notably in France. Elsewhere in the

region, the average rate of decline reaccelerated,hitting the fastest pace since July.

Core v. Periphery PMI Output Indices

20

30

40

50

60

70

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Germany

France

Rest 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 year

ahead 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


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demand and an uncertain outlook. The rate of

decline 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

20

30

40

50

60

70

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Germany

France

Rest of Eurozone

Composite Employment sa, 50 = no change on previous month

Source: Markit

Backlogs of orders fell across the region at thejoint-fastest rate since July 2009. Ongoing steeprates of decline in both manufacturing and services

point 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, Chris

Williamson, Chief Economist at Markit said:The eurozone economy continued to deteriorate atan alarming pace in November, and is entrenchedin the steepest downturn since mid-2009.

Officially, the region saw only a very modest slideback into recession in the third quarter, with GDPfalling by a mere 0.1%, but the PMI suggests thatthe downturn is set to gather pace significantly inthe fourth quarter. The final three months of theyear could see GDP fall by as much as 0.5%.

While it is reassuring to have seen signs ofstabilisation in some survey indicators, the overallrate of decline remains severe and has spread toencompass Germany, suggesting the situationcould deteriorate further in the coming months. Withjobs being cut at the second-fastest rate sinceJanuary 2010 and expectations for the year aheadin the services sector slumping to the lowest sinceMarch 2009, firms have clearly becomeincreasingly anxious about the economic outlookand are seeking to control costs as much aspossible. All this suggests that any swift return togrowth is unlikely.

-Ends-


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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

30

35

40

45

50

55

60

65

1998 1999 2000 20012002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Composite Manuf acturing Services

Eurozone PMIs - Output

New business

25

30

35

40

45

50

5560

65

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Eurozone PMIs - New Business

Employment

30

35

40

45

50

55

60

65

1998 1999 2000 20012002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Eurozone PMIs - Employment

Input prices

20

30

40

50

60

70

80

90

1998 1999 2000 20012002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Eurozone PMIs - Input Prices

Output prices

30

35

40

45

50

55

60

65

1998 1999 2000 20012002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Eurozone PMIs - Output Prices

Source: Markit.


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For further information, please contact:

MarkitChris Williamson, Chief Economist Rob Dobson, Senior EconomistTelephone +44-20-7260-2329 Telephone +44-1491-461-095Mobile +44-779-555-5061 Mobile +44-782-691-3863Email [email protected] Email [email protected]

Caroline Lumley, Corporate CommunicationsTelephone +44-20-7260-2047Mobile +44-78-1581-2162Email [email protected]

Note to Editors:

Final November data are published on 3 December for manufacturing and 5 December for services and composite indicators.The Eurozone PMI (Purchasing Managers' Index) is produced by Markit and is based on original survey data collected from arepresentative panel of around 5,000 companies based in the euro area manufacturing and service sectors. National manufacturing dataare included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. National services data areincluded for Germany, France, Italy, Spain and the Republic of Ireland. The flash estimate is typically based on approximately 85%90% oftotal PMIsurvey responses each month and is designed to provide an accurate advance indication of the final PMIdata.

The average differences between the flash and final PMIindex values (final minus flash) since comparisons were first available in January2006 are as follows (differences in absolute terms provide the better indication of true variation while average differences provide a betterindication of any bias):

Average Average differenceIndex difference in absolute terms

Eurozone Composite Output Index1 0.0 0.2Eurozone Manufacturing PMI3 0.0 0.2Eurozone Services Business Activity Index2 0.1 0.3

The Purchasing Managers Index

(PMI

) survey methodology has developed an outstanding reputation for providing the most up-to-datepossible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventoriesand prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help betterunderstand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including theEuropean Central Bank) use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditionspublished 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 asappropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, firstpublished seasonally adjusted series and subsequently revised data are available to subscribers from Markit. Please [email protected].

Notes1. The Composite Output PMIis 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 MarkitMarkit is a leading, global financial information services company with over 2,300 employees. The company provides independent data,valuations and trade processing across all asset classes in order to enhance transparency, reduce risk and improve operational efficiency.Its client base includes the most significant institutional participants in the financial market place. For more information, seehttp://www.markit.com/en/.

About PMIsNow available for 32 countries and key regions including the Eurozone, Purchasing Managers Index (PMI) surveys have become themost closely-watched business surveys in the world, favoured by central banks, financial markets and business decision makers for theirability to provide up-to-date, accurate and often unique monthly indicators of economic trends. To learn more go towww.markit.com/economics.

The intellectual property rights to the Flash Eurozone PMI

provided herein is owned by Markit Economics Limited. Any unauthorised use, includingbut not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markits prior consent. Markit shallnot have any liability, duty or obligation for or relating to the content or information (data) contained herein, any errors, inaccuracies, omissions ordelays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequentialdamages, arising out of the use of the data. Purchasing Managers' Index

and PMI

are registered trade marks of Markit Economics Limited. Markit and

the Markit logo are registered trade marks of Markit Group Limited.

eurozone flash pmi nov2012

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