France PMI January 2020


France: Private sector activity eases in January

January 24, 2020

The seasonally-adjusted IHS Markit Flash Composite Purchasing Managers’ Index (PMI) ticked down to 51.5 in January from 52.0 in December. Nevertheless, the index remained above the 50-threshold that separates expansion from contraction in business conditions.

January’s dip reflected easing activity in the services sector, likely linked to national railway strikes, while activity in the manufacturing sector strengthened slightly. Services providers saw growth in new orders fall to an eight-month low amid a decline in international demand. In contrasts, manufacturers registered a renewed rise in orderbooks, boosted by upbeat foreign demand. Meanwhile, employment expanded moderately thanks to upbeat job creation by services providers. Finally, business confidence rose to a nine-month high amid upbeat output expectations in the coming year.

In view of January’s developments, Pollyanna De Lima, Principal Economist at IHS Markit, noted:

“The flash PMI data continued to show a slowdown in economic growth across France. While there were warnings of softer conditions in the service sector, linked to national railway strikes, manufacturing displayed mild signs of revival. […] Encouragingly companies across both sectors are in buoyant mood regarding the year-ahead outlook for business activity, with optimism at a nine-month high. This upbeat growth projections continued to drive job creation and should ensure the private sector stays in expansion territory in the near-term.”

FocusEconomics Consensus Forecast panelists see fixed investment growing 2.2% in 2020, which is unchanged from last month’s forecast. For 2021, the panel sees fixed investment growth at 1.9%.


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France PMI Chart

France PMI January 20 20 0

Note: Markit Purchasing Managers’ Index (PMI). Readings above 50 indicate an overall increase compared to the previous month, and below 50 an overall decrease.
Source: Markit.

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