HCOB Services PMI

What is HCOB Eurozone Services PMI?

The HCOB Eurozone Services PMI is a monthly survey of eurozone services activity, compiled by S&P Global and sponsored by Hamburg Commercial Bank. Arabic financial calendars list it as the final eurozone services PMI reading.

It covers around 2000 private service firms in Germany, France, Italy, Spain and Ireland, which represent about 78% of eurozone services output. Covered activities include hotels, transport, communications, finance, real estate, business services, education and health.

The headline is the Services Business Activity Index, a single-question diffusion gauge of changed business volume versus the prior month. Scores run from 0 to 100, with 50 marking no change, above 50 marking growth and below 50 marking contraction. It measures euro area services only, not manufacturing, not United States services and not official government statistics.

When is it released and what happens each release?

Responses are collected in the second half of each month and record change versus the prior month. Each cycle brings a flash estimate during the reference month and a manufacturing final at the start of the next month. A joint services and composite final follows a few days later.

The joint release pairs both headlines with new business, employment, input and output prices, 12-month expectations and country tables. Each release also carries commentary by the HCOB Chief Economist.

The flash estimate rests on about 85% to 90% of responses and previews the final figure. Raw answers are never revised, although seasonal factors may be revised and shift the adjusted series.

What moves HCOB Eurozone Services PMI?

Services activity moves with demand, staffing, backlogs and costs, each tracked as its own diffusion gauge.

• Business Activity: the headline gauge of changed service volume versus the prior month.
• New Business and New Export Business: demand from domestic and foreign customers, including trade inside the eurozone.
• Future Activity: expected activity over the next 12 months, where 50 means no change.
• Employment: changes in staffing levels across service firms.
• Outstanding Business: unfinished orders and backlogs that signal capacity pressure.
• Input Prices and Prices Charged: operating cost inflation plus selling price inflation.

One final release put services at 51.4 against 52.9, still growing but at a slower pace. The companion composite stood at 49.6 against 51.0, showing manufacturing weakness offsetting services. Activity rose even as new work fell, drawing on backlogs that shrank for the 14th time in 15 months.

Service firms kept hiring while factory layoffs dragged total employment lower. Cost and selling price inflation cooled to their softest pace in 42 and 41 months respectively.

How is HCOB Eurozone Services PMI calculated?

1. Collection: questionnaires record the direction of change versus the prior month.
2. Diffusion: each score adds the share answering higher to half the share answering unchanged, on a 0 to 100 scale.
3. Illustration: for illustration, 30% higher and 50% unchanged gives 55.0, which signals growth.
4. Seasonal adjustment: indexes are adjusted for seasonal patterns and labelled sa.
5. Weighting: country indexes combine using national services annual value added from Eurostat.
6. Headline and reading: the headline uses one question on business volume, with 50 as no change. Above 50 means growth and below 50 means contraction.

Key point: the services headline comes from one question, so it cannot be compared with the multi-part Manufacturing PMI. The correct peer is the Manufacturing Output Index, and the weights behind Manufacturing PMI are 30%, 25%, 20%, 15% and 10%, with delivery times inverted. It covers the euro area rather than the whole European Union and is unrelated to United States services gauges.