FR: PMI Composite


Wed Nov 04 02:50:00 CST 2015

Consensus Actual Previous
Composite - Level 52.3 52.6 51.9
Services - Level 52.3 52.7 51.9

Highlights
The French private sector economy expanded slightly more quickly than originally thought in October. The final composite output index was 52.6, up 0.3 points versus its flash estimate and 0.7 points above its final September reading. The revised outturn was a 4-month high.

The upward adjustment came courtesy of the service sector where the PMI was nudged 0.4 points firmer to 52.7, almost a full point higher than its final September print and also a 4-month peak. As previously indicated, the pick-up here came largely on the back of a stronger increase in new orders although this was still relatively modest. Backlogs were also up but, again, only slightly. Employment was essentially unchanged having declined in September while business expectations were up marginally on last time but still short of the series' average.

Input cost inflation climbed to a 5-month high but was still historically weak and output prices fell again with a rate of decline accelerating to its sharpest since June.

Despite the positive headline revisions the French economy was still only expanding at a disappointingly sluggish rate at the start of the quarter. Forward looking indicators point to further growth of total output through year-end but the recovery as a whole looks unlikely to pick-up any real momentum any time soon.

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.