France PMI September 2016


Flash Composite PMI jumps to 15-month high in September

The composite Purchasing Managers’ Index (PMI), produced by IHS Markit, rose in September. The indicator increased from a revised 51.9 (previously reported: 51.6) in August to 53.3 in September. The result, which marks the highest reading since June 2015, surprised market analysts, who had expected a softer 51.4 result. The indicator now lies further above the 50-threshold that separates expansion from contraction.

September’s result reflected an increase in output from service providers, which more than offset flat growth in the manufacturing sector. New business increased in services but declined in manufacturing, though at the slowest pace in nine months. Employment in the French private sector rose marginally in September. At the sector level, staffing levels increased in services and decreased in manufacturing. Backlogs of works expanded in both services and manufacturing, with the former logging the sharpest increase. Regarding price developments, input prices rose in manufacturing and services while output prices dropped in both sectors.

IHS Markit noted that, “French private sector output growth strengthened at the end of the third quarter, reaching its joint-fastest pace in over five years. That was thanks to an improved performance from the dominant service sector, offsetting manufacturing stagnation. The data raise hopes of a firmer GDP print for the third quarter after growth ground to a halt in Q2.”

FocusEconomics Consensus Forecast panelists see fixed investment growing 2.3% in 2016, which is down 0.1 percentage points over the previous month’s estimate. For 2017, the panel sees investment expanding 1.7%.

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France PMI Chart

France PMI September 2016

Note: Markit Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Markit.

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