France: Flash composite PMI edges down in December but remains near record-high level
December 14, 2017
The IHS Markit flash composite Purchasing Managers’ Index (PMI) declined slightly from 60.3 points in November to 60.0 points in December. The figure showed a rate of expansion of economic activity that still among the sharpest ever recorded; it was the eighteenth consecutive month in which the PMI was above the 50-point threshold that separates expansion from contraction in business activity.
Both the services and manufacturing sectors broadly contributed to this month’s robust figure, although the dynamics were somewhat divergent. The rate of growth in the manufacturing sector was the highest in more than 17 years, while growth among service providers eased slightly from November. Accordingly, the figures showed robust new orders growth (particularly for exports), which compelled manufacturing firms to continue boosting output levels and increase the number of payrolls for the fourteenth consecutive month.
Employment growth was particularly upbeat in the manufacturing sector, hitting the highest point since September 2000. Despite that, backlogs of work continued to grow in both services and manufacturing, decelerating only slightly from the over-six-year high level recorded in November. Regarding price developments, input cost inflation was slightly down from November for manufacturing and service firms alike, but remained high due particularly to higher prices for raw materials.
Commenting on November’s figure, Alex Gill, Economist at IHS Markit, said:
“Although dipping fractionally from November’s six-and-a-half year high, the headline flash composite output PMI number remained among the highest recorded in the survey history during December, and completes what has been a strong year for the French private sector economy.”
Author: Joffrey Simonet, Economist