S&P Global Composite PMI

What is the HCOB Eurozone Composite PMI Output Index?

The HCOB Eurozone Composite PMI Output Index is S&P Global's monthly gauge of eurozone private-sector output. It covers about 5000 companies in the euro area, the single-currency bloc, not the full European Union. Panels span factories in 8 countries and service providers in 5 countries, grouped by sector and company size using value added shares. The headline is a diffusion index from 0 to 100, where 50.0 means no change from the prior month.

Readings above 50.0 signal expansion, while readings below 50.0 signal contraction. Distance from 50.0 signals the pace of change. It is not official output, not the full European Union economy, and not manufacturing alone, since services carry the larger weight. The composite blends Manufacturing Output with Services Business Activity and is not comparable with the headline Manufacturing PMI, which combines five manufacturing parts.

When is it released and what happens each release?

Responses are collected in the second half of each reference month and compare mid-month to mid-month with the prior month. A flash estimate from about 85% of replies appears within the reference month, with composite, services and manufacturing headlines together. Final readings follow in the following month, manufacturing before services, with the composite plus a country table.

Replies are never revised after publication, but seasonal factors can revise history. The flash is provisional and is superseded by the final. The European Central Bank uses the data for interest rate decisions.

What moves the HCOB Eurozone Composite PMI Output Index?

Sector indices set the headline, while reported drivers explain each move. Distance from 50.0 signals the pace of change. A fall that stays above 50.0 means slower growth, not contraction.

• Manufacturing Output Index: captures change in factory production volumes.
• Services Business Activity Index: captures change in services activity volumes.
• New orders: captures new business including export and intra-eurozone demand.
• Employment and backlogs: captures hiring plus outstanding work waiting to be done.
• Input costs and output charges: captures purchase prices paid versus prices charged.
• Business expectations: captures firms' outlook for future activity.

How is the HCOB Eurozone Composite PMI Output Index calculated?

1. Build panels: S&P Global recruits panels grouped by sector and company size using official value added shares.
2. Score replies: each country index equals the share reporting higher plus 0.5 times the share reporting unchanged, on a 0 to 100 scale. Example: 30% higher and 50% unchanged and 20% lower gives 55.0. A services example with 20% higher and 60% unchanged and 20% lower gives 50.0.
3. Weight countries: country indices are combined using national manufacturing and services annual value added.
4. Blend sectors: the composite is the weighted average of manufacturing output and services activity using eurozone value added shares. Example: 0.30 times 55.0 plus 0.70 times 50.0 equals 51.5, weak expansion. The value added split uses 30% manufacturing and 70% services in this illustration.
5. Adjust seasonally: results pass through Census X-12 ARIMA plus an in-house method to remove calendar effects.

Key point: the composite is not an average of headline PMIs. It blends Manufacturing Output with Services Business Activity, unlike the five-part Manufacturing PMI.