Markit EU Productivity PMI®
- May 8, 2012
Improvement in productivity short-lived
Key points:
Summary:
The seasonally adjusted EU Productivity PMI from Markit signalled a marginal contraction in output per head during April, bringing to an end the preceding three-month period of expansion.
Both manufacturers and service providers recorded a deterioration in productivity at the start of Q2. The fall in activity per employee was weaker in the latter, but in line with that recorded at the overall level, marking the first time this year a decline has been recorded.
Output per worker increased across just two of the EU’s four largest economies in April. The strongest overall fall in productivity was again recorded in the Italian private sector, where labour productivity decreased at the sharpest rate for three years. Output per head in the service sector fell at a quicker pace than at manufacturers.
French-based companies also recorded a fall in productivity during April. Moreover, the decrease was the first in four months and the sharpest since February 2009. Similar to Italy, the contraction was service sector-led.
The latest data indicated only a fractional improvement in productivity in Germany. An expansion recorded in the service sector was just sufficient to outweigh the decline in output per head in the manufacturing sector.
Labour productivity in the UK continued to rise at the strongest pace of the EU ‘big four’ during April, despite the rate of growth slowing on the month. UK-based service providers recorded a modest rise in output per head, while their goods-producing counterparts registered a fractional reduction.
By detailed sector, the latest data highlighted mixed productivity trends across the European Union. Reflecting this, nine of the 23 monitored industries recorded growth during April. Where declines were registered, the rates of contraction were generally modest on average.
The food manufacturing sector recorded the sharpest overall gain in output per worker during April, with the latest rise the strongest in the sector since August 2010. The telecommunications, building materials and paper and forest products sectors also posted solid gains in productivity during the month.
The transport, capital goods, diversified financial services, healthcare, IT software and luxury consumer goods sectors all registered solid declines in output per worker in April. For firms operating in the transport industry, the fall was the ninth in as many months.
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