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News Release Purchasing Managers’ Index® MARKET SENSITIVE INFORMATION EMBARGOED UNTIL 0955 (CET) / 0855 (UTC) December 1 2016 Markit/BME Germany Manufacturing PMI ® – final data November marks two years of manufacturing growth in Germany Key findings: Manufacturing PMI falls slightly amid slower increases in output and new orders Inventory levels stabilise, ending two-year period of decline Input cost inflation reaches 56-month high Data collected from November 11-23 Markit/BME Germany Manufacturing PMI Markit / BME Germany Manufacturing PMI vs. Bundesbank Manufacturing Output PMI, sa (50=no change) 65 % yr/yr 20 BB Manufacturing Output 15 60 10 55 5 50 0 -5 45 -10 40 mentioned China and Russia as sources of export growth. In response to increased new business, companies scaled up their production in November. However, the pace of expansion slowed since the prior month and was the least marked since May. Sector data signalled that the consumer and intermediate goods sub-sectors recorded solid growth of both output and new orders. Meanwhile, investment goods manufacturers reported weaker expansions. Manufacturing employment was raised further in November as companies tried to boost capacity. Although the rate of job creation slowed since October, it remained among the strongest over the past five years. -15 -20 35 -25 Markit / BME PMI 30 -30 25 -35 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Despite falling slightly to 54.3 from October’s 33month high of 55.0, the seasonally adjusted final Markit/BME Germany Manufacturing Purchasing ® ® Managers’ Index (PMI ) – a single-figure snapshot of the performance of the manufacturing economy – signalled ongoing growth of German manufacturing in November. Moreover, the PMI remained above its average for 2016 so far (53.0). November saw new order intakes rise at a solid pace. Despite slowing slightly since October, the pace of expansion was robust with panellists commenting on rising demand from both the domestic and foreign markets. Underlying data showed new export orders increased for the sixteenth straight month. When asked to comment on stronger foreign demand, some panellists Page 1 of 3 However, the solid rise in staffing levels was insufficient to prevent a further build-up of unfinished business. The rate of backlog accumulation remained marked overall, despite slowing from October’s 32-month high. Solid production growth meanwhile resulted in a stabilisation of post-production inventories. Prior to October, stocks of finished goods had fallen for two consecutive years. In a sign that supply chain pressures continued to develop, average lead times lengthened to the greatest extent in over two years. Panellists linked this to rising demand and a shortage of some raw materials. On the price front, latest survey results pointed to the most marked increase in input costs since March 2012. Some panellists attributed inflation to exchange rate factors while others commented on higher prices for raw materials. A number of companies passed increased input © IHS Markit 2016 costs on to their customers in the form of higher selling prices. However, the rate of charge inflation slowed slightly since October. Purchasing activity rose markedly in November, which panel members attributed to rising new orders and efforts to build stock. Consequently, preproduction inventories stabilised. Comment Commenting on the final Markit/BME Germany ® Manufacturing PMI survey data, Oliver Kolodseike, Economist at IHS Markit said: “Today’s survey results highlight that Germany’s manufacturing sector remained in good shape in November. Although the PMI dipped slightly from October’s 33-month high, the average reading over the fourth quarter so far was in fact the best since early-2014, thereby suggesting that the sector should have a positive contribution to GDP growth at the end of the year. “Although indicators for production, new business and employment all nudged down since October, the underlying rates of growth remained strong and above their respective long-run averages. Moreover, with backlogs rising sharply and companies ramping up their purchasing activity, it is likely that the positive trend in the sector continues into the new year. “Meanwhile, the rate of cost inflation accelerated substantially as higher raw material prices and exchange rate factors exerted upward pressure on prices. Input costs increased at the fastest pace since 2012.” -Ends- For further information, please contact: IHS Markit Oliver Kolodseike, Economist Telephone +44-1491-461-003 Email: [email protected] Joanna Vickers, Corporate Communications Telephone +44207 260 2234 Email [email protected] Note to Editors: The Germany Manufacturing PMI® (Purchasing Managers' Index®) is produced by Markit Economics and is based on original survey data collected from a representative panel of over 500 companies based in the German manufacturing sector. The final Germany Manufacturing PMI follows on from the flash estimate which is released a week earlier and is typically based on at least 75% of total PMI survey responses each month. The November flash was based on 95% of the replies used in the final data. Page 2 of 3 © IHS Markit 2016 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 Germany Manufacturing PMI3 Average difference 0.0 Average difference in absolute terms 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 Markit/BME Germany Manufacturing 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. Page 3 of 3 © IHS Markit 2016