FR: PMI Composite


Wed Mar 04 02:50:00 CST 2015

Consensus Actual Previous
Composite - Level 52.2 52.2 49.3
Services - Level 53.4 53.4 49.4

Highlights
There were no revisions to the composite output index in the final data for February. At 52.2, the overall measure of economic production matched its flash print and was up 2.9 points from its final January reading. This was its strongest level in forty-two months. The service sector PMI was similarly unrevised at 53.4, some 4 points higher than at the start of the year.

Within services, new business expanded for a third month in a row and, particularly promisingly, at its fastest rate since August 2011. Backlogs also increased again, and more quickly than in any month during the last three-and-a-half years, but employment fell, albeit only weakly.

Input costs were up again but only mildly and, more significantly, service provider charges continued to fall at much the same rapid pace as in January. Even so, business expectations were still positive and improved to their highest level in just under three years.

Today's PMI results suggest that the French service sector is on the mend and bode well for continued expansion over coming months. However, manufacturing (PMI 47.6) continues to lag badly behind and looks certain to act as a break on first quarter GDP growth.

Definition
The Composite PMI is produced by Markit and is based on original survey data collected from a representative panel of over 700 companies based in the French private sector economy. The final France Composite PMI follows on from the flash estimate which is released a week earlier and is typically based on at least 75 percent of total PMI survey responses each month.

The Services PMI is produced by Markit and is based on original survey data collected from a representative panel of over 300 companies based in the French service sector. The final France Services PMI follows on from the flash estimate which is released a week earlier and is typically based on at least 75 percent of total PMI survey responses each month.


Description
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.