|Composite - Level||51.0||52.0||50.6|
|Services - Level||51.6||52.8||51.4|
The private sector French economy outperformed original estimates last month. At 52.0, the final composite output index was a full point above its earlier reading and 1.4 points higher than its final April print.
The upward revision reflected primarily a stronger adjusted service sector PMI which now stands at 52.8, 1.2 points firmer than previously reported and 1.4 points above its final level at the start of the quarter.
As indicated earlier, May's service sector improvement was largely attributable to the sharpest increase in new business since August 2011. Employment growth also accelerated but remained modest and the rate of expansion in backlogs was the slowest in five months. Even so, business expectations were the strongest in more than three years.
Input costs continued to rise and cost inflation climbed to a 9-month high but service provider charges fell again and so continued the trend seen since April 2012.
The revised data mean that that the French economy probably picked up some momentum last month and the acceleration in new orders points to a decent end to the quarter. Even so, it remains to be seen if the recovery is as well established as the May PMI surveys' suggest and deflationary pressures remain a real worry.
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.
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.
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