FR: PMI Composite


Wed Aug 05 02:50:00 CDT 2015

Consensus Actual Previous
Composite - Level 51.5 51.5 53.3
Services - Level 52.0 52.0 54.1

Highlights
French economic activity was as per the flash PMI report according to the final data for July. At 51.5 (a 3-month low) and 52.0 respectively, both the final composite output index and service sector PMI matched their respective provisional readings.

As indicated earlier, a 1.1 point monthly drop in the services PMI was largely due to smaller rises in both new orders and backlogs. Employment also decreased slightly and business expectations dropped to their lowest level so far in 2015.

Service sector input prices rose once more but output prices continued to spiral down, again reflecting very competitive market conditions.

Today's update leaves intact a picture of sluggish economic growth and near-zero inflation pressures. The bottom line is that the economy got off to a poor start this quarter and there is nothing here 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.