FR: PMI Composite


Wed May 06 02:50:00 CDT 2015

Consensus Actual Previous
Composite - Level 50.2 50.6 51.5
Services - Level 50.8 51.4 52.4

Highlights
April service sector growth was slightly faster than originally estimated as the flash index was revised up from 50.8 to a final 51.4. In line, the key composite output index was also shaded higher and now stands at 50.6, only 0.4 points above its preliminary estimate and still a disappointingly large 0.9 points short of its final March print. Both measures registered 3-month lows.

For the services sector, the monthly drop in the PMI reflected a smaller increase in new business although backlogs were up for a fifth consecutive month. Employment also advanced for a second successive month but, while rising by the largest extent since December 2011, headcount was still only marginally higher than in March. Even so, business expectations continued to climb and April's level was the strongest in just over three years.

Input prices increased again but the rate of cost inflation eased to a 3-month low. Service provider charges were down for a remarkable thirty-seventh consecutive month although the pace of decline at least slowed.

Today's report signals little more than stagnation in the French private sector economy last month. Moreover, with growth of new business slowing it looks as if the second quarter is unlikely to be much better. Taken together with further signs of on-going deflationary pressures, there is little to put a smile on the ECB's face.

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.