| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Composite Index | 47.3 | 47.3 to 47.3 | 47.8 | 48.0 |
| Services Index | 46.8 | 46.8 to 46.8 | 47.3 | 47.9 |
Highlights
The French service economy started the second quarter negatively, with the PMI falling to 47.3 in April. While improving on the flash reading of 46.8, it's below the March result of 47.9, marking the eighth successive month below the expansion benchmark of 50.
Order books contracted in one of their most pronounced declines since the end of 2020. At the same time, export sales were more positive, indicating weak domestic demand. With the decline in activity, French companies were able to work off order backlogs.
Prices were a mixed picture, with some firms forced into raising prices and passing increases onto their customers. Others were giving discounts due to strong competition, possibly in an effort to maintain market share.
The composite index which also includes manufacturing, was at 47.8 in April, slightly lower than 48.0 in March. The decline was solely due to the services sector, as manufacturing increased for the first time in almost three years.
Still, both services and manufacturing industries are contracting, and while service companies have a slightly more positive 12-month outlook, expectations are well below the long-term trend given global turmoil.
Order books contracted in one of their most pronounced declines since the end of 2020. At the same time, export sales were more positive, indicating weak domestic demand. With the decline in activity, French companies were able to work off order backlogs.
Prices were a mixed picture, with some firms forced into raising prices and passing increases onto their customers. Others were giving discounts due to strong competition, possibly in an effort to maintain market share.
The composite index which also includes manufacturing, was at 47.8 in April, slightly lower than 48.0 in March. The decline was solely due to the services sector, as manufacturing increased for the first time in almost three years.
Still, both services and manufacturing industries are contracting, and while service companies have a slightly more positive 12-month outlook, expectations are well below the long-term trend given global turmoil.
Market Consensus Before Announcement
No change from the flash at 47.3 is the call for the April composite final, down from 48.0 in March. No change is expected from the flash at 46.8 for services, down from 47.9 in March.
Definition
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 S&P Global.
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.
