France: Flash Composite PMI drops marginally in October
October 24, 2016
The Markit Flash Composite Purchasing Managers’ Index (PMI) dropped from a revised 52.7 (previously reported: 53.3) in September to 52.2 in October. The result, which marks a drop from September’s over one-year high, matched market analysts’ expectations. Despite the decline, the indicator remains above the 50-threshold that separates expansion from contraction.
October’s result reflected divergent trends in the French private sector. While manufacturing firms expanded at the fastest pace since March 2014, activity in the services sector grew at a softer pace, though the rate of expansion remained solid. New business increased, albeit at a slower pace. Employment in the French private sector dropped marginally in the surveyed month. Backlogs of works rose at the sharpest rate in over five years and expanded in both services and manufacturing. Business expectations continued to strengthen in October owing to increased demand and reached the highest level since April. Regarding price developments, input prices rose in manufacturing and services while output prices dropped in both sectors.
IHS Markit noted that, “With signs of intensifying capacity pressures and service providers indicating expectations for near-term growth, the outlook for the rest of 2016 looks reasonably positive.”