French architecture in France

France PMI March 2020

France: Private sector activity contracts at the sharpest pace in over two decades in March

The seasonally-adjusted IHS Markit Flash Composite Purchasing Managers’ Index (PMI) plummeted to 28.9 in March from 52.0 in February, its lowest result in nearly 22 years of data collection. Thus, the index fell below the 50-threshold that separates contraction from expansion in business conditions.

March’s downturn reflected a widespread shutdown in business activity due to the Covid-19 pandemic. The service sector took the worst beating, reporting the sharpest fall in activity since the series began in May 1998, while activity in the manufacturing sector declined at the quickest pace in over a decade. Overall new orders contracted at the fastest pace in the series’ history. Finally, the one-year business outlook was the most pessimistic since data collection began in July 2012.

In view of March’s developments, Eliot Kerr, Economist at IHS Markit, noted:

“The results were similar in the manufacturing sector, leading to a historic decline in private sector activity. Moreover, the difficult situation is set to continue with widespread lockdowns expected to remain in place until infection rates are quelled. “It is now important that fiscal policy is effectively implemented to stem the flow of job losses and prevent a prolonged period of economic turmoil. In the short-term, a broad-based global economic recession is all but guaranteed, however governments around the world can take action to limit the longevity of disruption.”

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