France: Flash Composite PMI reaches six-year high in May
May 24, 2017
The Markit Flash Composite Purchasing Managers’ Index (PMI) spiked from a revised 56.6 (previously reported: 57.4) in April to 57.6 in May, overshooting market analysts’ expectations of a much softer 56.7 reading. The result, which marks the highest reading since May 2011 and the eleventh consecutive monthly expansion, has moved the indicator further above the 50-threshold that separates expansion from contraction.
May’s print reflected a robust expansion in manufacturing and services, with the latter increasing at a six-year high. Growth in both sector was buttressed by a strong expansion in new business that was in turn supported by an increase in new orders. This compelled firms in the private sector to increase staffing levels to accommodate higher demand for the seventh month running. Regarding price developments, output prices rose in both sectors as firms passed on higher input costs to consumers. Lastly, the survey went on to add that output growth outlook for the upcoming year in the private sector was positive as strong external demand, introduction of new products and the end of the presidential elections is fueling optimism.
Commenting on May’s strong reading, economist Alex Gill said that, “the numbers continue to paint a positive picture of the French private sector economy. Furthermore, with May’s conclusion to the presidential elections, the road looks set fair for future growth. However, eyes will now turn to June’s legislative elections as a next potential stumbling block.”