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France: Composite PMI moderates in April; rests just above contractionary territory

April 23, 2015

The composite Purchasing Managers’ Index (PMI) elaborated by Markit moderated in April, inching down from 51.5 to 50.2. As a result, the composite PMI fell closer to the 50-threshold that separates expansion from contraction in business activity, although signaling expansion for the third consecutive month.

According to Markit, the reading signaled “an easing in the rate of expansion of private sector output to near-stagnation in April.” The result came on the back of a weaker growth in service sector activity than in the previous month, combined with a sharper decrease in manufacturing activity. Growth in services was marginal and marked a three-month low. Markit reported that new business growth also moderated and recorded the smallest pace of expansion in three month. Moreover, new export orders in the manufacturing sector continued to contract in April and reached a six-month low. Meanwhile, employment rose for the second consecutive month, but the increase remains marginal.

Markit concluded that, “[o]utput growth stuttered almost to a halt in April, signaling a continuation of the moribund economic environment in France. New business growth weakened despite a further marked fall in prices charged, highlighting the competitive challenge facing French companies.”

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 April 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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