HCOB Composite PMI

What is HCOB Eurozone Composite PMI?

The HCOB Eurozone Composite PMI measures month on month change in eurozone private sector business activity through a monthly survey. The headline figure is the Composite Output Index, which may be called the Composite PMI. S&P Global compiles the survey from around 5000 private sector companies. Hamburg Commercial Bank acts as naming sponsor, and HCOB Chief Economist Dr Cyrus de la Rubia comments on results.

Panels cover manufacturers in 8 countries and service providers in 5 countries, stratified by sector and workforce size using shares of GDP. PMI surveys cover over 40 countries and key regions including the eurozone. The index tracks eurozone aggregates only, not national detail, and signals survey based change, not GDP itself. A reading above 50 signals growth from the previous month, while below 50 signals contraction, with 50 marking no change.

The scale runs from 0 to 100 after seasonal adjustment. Diffusion results feed eurozone aggregation using national value added shares from Eurostat. The composite therefore blends factory and services activity into one monthly signal for activity and price pressure.

When is it released and what happens each release?

Responses are collected in the second half of each survey month and show direction of change from the previous month. A provisional flash estimate appears during the survey month and uses around 85% to 90% of responses. Final manufacturing data appear early in the following month, with final services and composite data plus related indices and commentary. Each release covers Manufacturing PMI and Manufacturing Output Index plus Services Business Activity Index.

It also covers output prices and input costs plus new orders including export orders and employment. It also covers backlogs of work and business expectations plus a country ranking and economist commentary. Survey data are not revised after publication, while seasonal adjustment factors may be revised from time to time. The final replaces the flash and gives the fuller picture.

What moves HCOB Eurozone Composite PMI?

Two activity gauges feed the headline, with demand and hiring and prices shaping direction. Manufacturing Output Index captures changes in factory production volumes. Services Business Activity Index captures changes in services activity volumes from a single survey question. The services gauge is comparable to Manufacturing Output Index and may be called the Services PMI.

The headline Manufacturing PMI is different, as it averages 5 manufacturing indices including Manufacturing Output Index. The Composite Output Index is therefore not comparable with the headline Manufacturing PMI. Demand context includes new orders and export orders plus employment and backlogs and expectations.

Price context includes input costs and output prices, which link activity to inflation pressure. A rising reading below 50 means easing contraction, not growth, and the headline can improve while services soften.

How is HCOB Eurozone Composite PMI calculated?

Country results use a diffusion formula that adds the share answering higher to half the share answering unchanged. Results are seasonally adjusted and reported on a scale from 0 to 100 after seasonal adjustment. Eurozone sector indices weight country indices by national manufacturing and services annual value added from Eurostat. The Composite Output Index is a weighted average of Manufacturing Output Index and Services Business Activity Index using eurozone value added shares.

For illustration, 48.0 for factories and 52.0 for services at 25% and 75% weights gives 51.0 which signals growth despite factory contraction. The flash is an early estimate from around 85% to 90% of responses, not the final reading.