FR: PMI Composite


Tue Apr 05 02:50:00 CDT 2016

Consensus Actual Previous
Composite - Level 51.1 50.0 49.3
Services - Level 51.2 49.9 49.2

Highlights
French economic activity was a good deal softer than originally thought in March. The flash composite output index was revised down an unusually large 1.1 points to 50.0 which, while a 2-month high, suggests that private sector output only stagnated over the period.

The downward adjustment was wholly attributable to a weaker revised service sector for which the initial PMI figure of 51.2 was cut to just 49.9 in the final report. New business was flat and although backlogs recorded a modest overall gain, employment fell for the first time in three months. Nonetheless, business expectations improved to reach their highest level in seven months.

Inflation news was mixed. Hence, although input costs rose at their sharpest rate in eight months, service provider charges fell again to extend the current period of decline to some four years.

March's surprisingly large revisions leave service sector activity essentially flat over the first quarter, to all intents and purposes matching the performance of manufacturing. Accordingly, if the survey findings are to be believed, overall real GDP growth looks set to register at best only a minimal gain.

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.