|Composite - Level||52.2||51.6||52.7|
|Services - Level||52.1||51.4||53.3|
October's composite output index was revised down 0.6 points to 51.6 in the final data, 1.1 points below its final September outturn and a 3-month low but at least still on the right side of the 50 growth threshold.
The adjustment in large part reflected a weaker services sector and the flash PMI here was revised 0.7 points lower to 51.4, nearly 2 points short of its final reading in September and also a 3-month trough.
As previously indicated, services were hit by slower growth of new orders which rose only marginally on the month. Backlogs were also up but employment posted a small decline. More optimistically, business expectations remained positive and actually increased versus September. Inflation developments were mixed with service providers reporting their eighty-second increase in input costs but still lowering output prices in the face of stiff competition.
The revised October PMI data point to only a moderate period for French economic activity and the deceleration in the growth of new business warns that November and December might not be any better.
The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of around 750 manufacturing and service sector companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by Markit.
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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