S&P Global Germany Composite Purchasing Managers Index (PMI)

The German Purchasing Manager Indices (PMI) are compiled by IHS Markit and are based on surveys of a representative sample of 1000 companies in industry and services. The Flash indices are based on around 85% of the feedback from the monthly survey and thus provide a detailed early estimate of the final PMIs.

The Composite Output PMI is a weighted average of the Manufacturing Output Index and the Services Business Activity Index.

The index of business activity in the services sector is the direct equivalent of the index of industrial production and is based on the question "Is business activity in your company higher, equal or lower than a month ago?” The Purchasing Managers' Index for Industry is an index consisting of the weighted combination of the following five sub-indices (weighting in brackets): new orders (0.3), production (0.25), employment (0.2), delivery times (0.15), stocks of raw materials (0.1). The delivery times index is an inverse index. The industrial production index is based on the question “Is the production/performance in your enterprise higher, equal to or lower than a month ago?”

The averages between the preliminary estimates and the final PMIs (final value minus flash value) differ only slightly according to the historical data series available since January 2006.

The Einkaufsmanagerindex™/Purchasing Managers' Index® (EMI™, PMI®) tracks the actual economic situation in the private sector at the earliest possible point in time by reflecting developments in sales, employment, inventories and prices. The indices are held in high esteem by decision-makers in business, governments and economic researchers at financial institutions and are frequently used by them. They provide appropriate information for a better understanding of the economic environment and serve as orientation for decisions on corporate and investment strategy. The PMIs also play a particularly important role in the interest rate decisions of many central banks (including the European Central Bank). Much earlier than official statistics, the PMIs are the first leading indicators available to provide monthly information on the actual development of the economy.

The index is an early indicator for the economy as a whole. The growth of the combined PMI is an indicator of favourable market conditions and can be seen as positive for the euro.