France: Flash composite PMI picks up in April
April 23, 2018
The IHS Markit flash composite Purchasing Managers’ Index (PMI) rose from a revised 56.3 points in March (previously reported: 56.2 points) to 56.9 points in April. The reading came in well above market expectations of a drop to 55.9 points. The indicator remained above the 50-point threshold that separates expansion from contraction in business activity, and the rate of expansion in April exceeded the long-run series average of 53.9 points.
April’s increase reflected sharper expansions in the manufacturing and services sectors. Growth in these two sectors was buttressed by higher volumes of new orders and output, which both expanded well above their long-run series average. In turn, staffing levels in manufacturing and services rose to accommodate higher demand, with services recording the largest increase in employment in the month surveyed. Despite increased staffing, backlogs of work accumulated in April for the eighth consecutive month. Regarding price developments, a rise in labor and raw material costs drove input prices higher and caused output prices to increase as well.
Commenting on April’s figure, Alex Gill, Economist at IHS Markit, said:
“After having shown signs of slowing in recent months, the data will buoy hopes that the renaissance in the French economy has far from run its course. Further encouragement can be garnered from the broad-based nature of the acceleration, with sharper growth evident in both the manufacturing and services sectors, the former on the back of marked moderations in the prior two months.”
France Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists see fixed investment growing 3.0% in 2018, which is up 0.2 percentage points from last month’s estimate. For 2019, the panel sees fixed investment expanding 2.6%.