HCOB Composite PMI

What is HCOB Eurozone Composite PMI?

The HCOB Eurozone Composite PMI (Purchasing Managers' Index) tracks monthly direction of change, not the level, for private-sector output across the euro area. Its headline figure is the Composite Output Index, a diffusion index with 50.0 as the no-change mark. S&P Global compiles it from about 5000 firms, and Hamburg Commercial Bank (HCOB), a Hamburg-based commercial bank, sponsors the series.

It belongs to the S&P Global PMI survey programme covering more than 40 countries and key regions including the eurozone. It covers manufacturing and services only, not the public sector, retail, construction or agriculture, and central banks use it as an early business signal.

When is it released and what happens each release?

Responses are collected in the second half of each month and record change versus the previous month. Flash, a provisional estimate, appears within the reference month from about 85% of responses under embargo at a morning hour. It covers Germany, France and the rest of the eurozone. Manufacturing final follows at the start of the next month, with services and composite close after, under the same morning embargo.

Each release adds sector, country and price detail. It includes sub-indices for new orders, export business, backlogs, employment, costs, prices and expectations, plus commentary by HCOB and S&P Global economists. Survey answers are never revised after publication, while seasonal factors can be revised. Markets read the level against 50.0 with direction and pace of change.

What moves HCOB Eurozone Composite PMI?

The composite rises or falls with its two output gauges, weighted by value added for each sector.

• Manufacturing Output Index: whether factory production is higher, same or lower than one month before in one survey question.
• Services Business Activity Index: whether service-provider business volume is higher, same or lower than one month before in one survey question.

Country results are grouped by national value added. Accompanying measures include new orders, export orders, backlogs, employment, purchases, delivery times and stocks. Input and output prices with future output shape interpretation without entering the composite.

How is HCOB Eurozone Composite PMI calculated?

1. Collect answers: each question asks whether change is higher, same or lower versus one month before.
2. Diffusion index: Index equals share reporting higher plus 0.5 times the share reporting unchanged, on a 0 to 100 scale. For 30% higher and 50% unchanged, the index is 55.0.
3. Seasonal adjustment: adjust each index for normal seasonal patterns to allow comparison across months.
4. Country weighting: weight national indices by Eurostat annual value added for manufacturing and services.
5. Composite weighting: average eurozone Manufacturing Output and Services Activity indices by eurozone value-added shares, which move with GDP structure. With illustrative shares of 25% and 75%, 48.0 and 49.0 give 48.8, below 50.0.
6. Flash versus final and contrast: flash repeats the math on about 85% of responses, while final uses the full panel. Headline Manufacturing PMI weights five indices, so it can differ from the composite. It weights new orders 30%, output 25%, employment 20%, delivery times 15% and stocks 10%, with delivery times inverted.

Key point: Do not compare the Composite PMI with headline Manufacturing PMI, and do not read 47.9 as a 47.9% drop in output. It means more-weighted activity fell than rose, not a 47.9% output fall.