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 45.8 (45.7 in October). Two-month high. Flash Eurozone Services PMI Activity Index 45.7 (46.0 in October). 40-month low. Flash Eurozone Manufacturing PMI (45.4 in October). Eight-month high.
(3) (1)

at at

(2)

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
Composite Output, sa, 50 = no change on previous month 70

at 46.2
(4)

Flash Eurozone Manufacturing PMI Output Index at 45.9 (45.0 in October). Two-month high.
Data collected 12-21 November.

60

50

40

The Markit Eurozone PMI Composite Output Index was little-changed in November according the flash estimate, up fractionally from 45.7 in October to 45.8. Octobers reading had been the lowest since June 2009 and, for the fourth quarter of 2012 so far, PMI data suggest the strongest contraction of output since the second quarter of 2009. Markit (Flash) Eurozone PMI and GDP
PMI Output Index, sa, 50 = no change 65 60 1.0 55 50 45 40 0.0 GDP, %q/q 2.0

Germany
30

France Rest of Eurozone

20 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Markit

The ongoing drop in output reflected a further steep deterioration in new business, which fell at one of the fastest rates seen since mid-2009. A sharper rate of decline in the services sector was partly offset by manufacturers reporting that their rate of loss of new orders had eased slightly to the weakest for eight months. The plight of the service sector was also highlighted by 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 manufacturing sector also pointed to ongoing weakness in the coming months. The amount of goods purchased for use in production fell steeply, causing stocks of purchases to contract at the same pace as the near-three year record seen in October. Companies also sought to run down their inventories of finished goods, which showed the largest monthly fall since August 2010. Employment fell across the region for the eleventh successive month, with the rate of job losses running at the second-fastest since January 2010 as firms sought to reduce costs in the face of weak

-1.0

PMI
35 30 1999 2000 2001 2002 2003 2004 2005

GDP

-2.0

-3.0 2006 2007 2008 2009 2010 2011 2012

Source: Markit, Eurostat. GDP = gross domestic product

Activity has now fallen in 14 of the last 15 months, with the exception being a marginal increase seen in January. Output fell sharply in both the manufacturing and service sectors and, while the former saw the rate of contraction ease slightly, the latter saw business activity fall at a rate not seen since July 2009. By country, the rates of decline in output eased in both France and Germany but remained

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demand and an uncertain outlook. The rate of decline steepened in services but eased in manufacturing. Job cutting also spread geographically. German employment dropped at the fastest rate since January 2010, while the rate of job losses in the periphery was the fastest since July. Job losses also continued to be reported in France, albeit to the weakest degree since June. Core v. Periphery PMI Employment Indices
Composite Employment sa, 50 = no change on previous month 70

Commenting on the flash PMI data, Chris Williamson, 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-

60

50

40

Germany
30

France Rest of Eurozone

20 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Markit

Backlogs of orders fell across the region at the joint-fastest rate since July 2009. Ongoing steep rates of decline in both manufacturing and services point to the strong possibility of further job shedding in December, as companies seek to reduce capacity in line with order books. Input costs across both sectors continued to rise in November, albeit at the weakest rate for three months. Prices charged for goods and services both continued to fall, however, with service providers reporting by far the steeper rate of decline, linked in many cases to the need to offer discounts in the face of sluggish demand.

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Summary of November data

Output Composite Output falls for tenth month running, at broadly similar pace to October (45.8). Activity falls at fastest rate since July 2009. Production declines at slightly weaker rate than in October. New business declines for sixteenth successive month. New business falls at secondfastest rate in over three years. New orders fall at weakest rate since March. Outstanding business continues to decline sharply. Seventeenth successive monthly decline. Backlogs fall at slowest rate since May. Jobs decline for eleventh month running. Second-fastest rate of job shedding since November 2009. Employment declines at weaker rate than in October. Input price inflation eases further. Input price inflation eases to five-month low. Input price inflation at threemonth low. Output prices fall for eighth month running. Charges down for twelfth month running. Output prices fall for sixth straight month, albeit marginally. PMI below 50.0 for sixteenth month running, but improves to eight-month high of 46.2.

Output
Eurozone PMIs - Output 65 60 55 50 45 40 35 30 Composite Manufacturing Services

Services Manufacturing

New Orders

Composite Services Manufacturing

1 998 1 999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201 201 201 0 1 2

New business
Eurozone PMIs - New Business 65 60 55 50 45 40 35 30 Composite Manufacturing Services

Backlogs of Work Composite Services Manufacturing

Employment

Composite Services

25

1 998 1 999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201 201 201 0 1 2

Employment
Eurozone PMIs - Employment 65 Composite 60 55 Manufacturing Services

Manufacturing

Input Prices

Composite Services Manufacturing

50 45 40 35 30
1 998 1 999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201 201 201 0 1 2

Output Prices

Composite Services Manufacturing

Input prices
Eurozone PMIs - Input Prices 90 80 70 60 50 40 30 Composite 20
1 998 1 999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201 201 201 0 1 2

PMI

(3)

Manufacturing

Manufacturing

Services

Output prices
Eurozone PMIs - Output Prices 65 60 55 50 45 40 35 30 Composite Manufacturing Services

1 998 1 999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201 201 201 0 1 2

Source: Markit.

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For further information, please contact: Markit Chris Williamson, Chief Economist Telephone +44-20-7260-2329 Mobile +44-779-555-5061 Email chris.williamson@markit.com Caroline Lumley, Corporate Communications Telephone +44-20-7260-2047 Mobile +44-78-1581-2162 Email caroline.lumley@markit.com 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 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): Average Average difference Index difference in absolute terms Eurozone Composite Output Index1 0.0 0.2 0.0 0.2 Eurozone Manufacturing PMI3 0.1 0.3 Eurozone Services Business Activity Index2 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 economics@markit.com.
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?

Rob Dobson, Senior Economist Telephone +44-1491-461-095 Mobile +44-782-691-3863 Email rob.dobson@markit.com

About Markit Markit 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, see http://www.markit.com/en/. About PMIs Now available for 32 countries and key regions including the Eurozone, Purchasing Managers Index (PMI) surveys have become 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/economics.

The intellectual property rights to the Flash Eurozone PMI provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markits prior consent. 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 Markit be liable for any special, incidental, or consequential damages, 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.

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