France: Flash Composite PMI jumps to almost six-year high in March
March 24, 2017
The Markit Flash Composite Purchasing Managers’ Index (PMI) spiked from a revised 55.9 (previously reported: 56.2) in February to 57.6 in March, overshooting market analysts’ expectations of a softer 55.7 reading. The result, which marks the highest reading since May 2011, has moved the indicator further above the 50-threshold that separates expansion from contraction.
March’s print reflects an expansion in the services and manufacturing sector. Output and client demand increased in both sectors. Respondents showed higher confidence in March supported by expectations of strong demand from the United States and Asia and a favorable post-election outcome in France. This, coupled with increased client demand, prompted firms into hiring more workers to accommodate increased demand. Regarding price developments, input costs and output prices rose, the latter of which increased for the time since April 2012.
Commenting on March strong reading on manufacturing activity, economist Alex Gill said that “These numbers paint a rosy picture of the French private sector, as we start to see the effect of various governmental reforms enacted over the last few years. […] There is also further evidence that the weakened euro is continuing to boost external demand.”