FR: PMI Composite


Thu Dec 03 02:50:00 CST 2015

Consensus Actual Previous
Composite - Level 51.3 51.0 52.6
Services - Level 51.3 51.0 52.7

Highlights
Service sector activity was slightly softer than originally thought in November. At 51.0, the final PMI was 0.3 points below its flash estimate and, more worryingly, nearly 2 points below its final October reading. As a result, the final composite output index was also shaded 0.3 points to stand at 51.0, 1.6 points shy of its final print at the start of the quarter and a 3-month low.

However, it was not all bad news as new orders received by service providers rose and while growth was only moderate, it still saw its highest rate in five months. Backlogs were also up although at a somewhat slower pace than in the previous month. Meantime, employment again declined as a number of firms chose not to replace voluntary leavers but business expectations remained positive.

Input costs increased again but the rate of cost inflation stayed low and, indeed, decreased versus October. In any event, service provider charges maintained their downward spiral in line with the trend that began back in April 2012.

November's results suggest a very moderate period for French economic activity. The month's terrorists' attacks in Paris seem to have had some impact, notably in the hotels and the restaurants subsector, but underlying momentum was already soft. Fourth quarter real GDP growth will struggle to beat the modest 0.3 percent quarterly rate recorded in July-September.

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.