France: Composite PMI jumps to ten-month high in August
August 23, 2016
The composite Purchasing Managers’ Index (PMI), elaborated by IHS Markit, rose in August. The indicator went up from a revised 50.1 (previously reported: 50.0) in July to 51.6 in August. The result, which marks the highest reading since October 2015, surprised market analysts who had expected a softer 50.4 increase. As a result, the indicator lies above the 50-threshold that separates expansion from contraction.
August’s result reflected higher output from services providers which more than offset flat growth in the manufacturing sector. Service providers’ output rose on the back of new work intakes. Employment decreased in the service and manufacturing sectors with the latter tallying a sharper drop in staffing levels. Regarding price developments, input prices dropped marginally while output prices dropped at a faster pace compared to the previous month.
IHS Markit noted that, “France’s private sector economy gathered some momentum in August, raising hopes of a pick-up in GDP growth after the stagnation seen in the second quarter. A stronger contribution from the service sector bolstered overall output, while manufacturing held its ground to halt a recent slide. That said, the trend in incoming new business remains muted while firms indicated a return to job shedding in the latest month, suggesting that the recovery remains stuck in the slow lane”