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France: Composite PMI in July drops to three-month low, remains in expansionary territory

July 24, 2015

The composite Purchasing Managers’ Index (PMI) elaborated by Markit, decreased in July, falling from 53.3 in June to 51.5, which marked the lowest value in three months. However, the composite PMI remains above the 50-threshold that separates expansion from contraction in business activity, signaling expansion for the sixth consecutive month.

The result came on the back of weaker growth in the service sector activity, compared to the previous month, which reported the softest expansion in three months. In addition, manufacturing activity dropped in July, following zero growth in the previous month. However, Markit reported that new business growth increased for the eight consecutive month. Meanwhile, employment recorded its first fall in five months.

Markit concluded that, “the French private sector economy started the third quarter on a softer note, as growth momentum slowed in July from the near-four year high seen in June. Weaker inflows of new business were reported, while employment slipped back into contraction for the first time in five months. Overall, the data point to an economy still struggling to generate a head of steam, further fueling the suspicion that GDP growth is unlikely to be sustained at the 0.6% pace reported in the first quarter of the year.”

FocusEconomics Consensus Forecast panelists see fixed investment contracting 0.4% in 2015, which is down 0.1 percentage points from the previous month’s estimate. For 2016, the panel expects fixed investment to rebound and expand 2.2%.


Author:, Economist

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France PMI July 2015

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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