| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Composite Index | 48.5 | 48.5 to 48.5 | 49.2 | 49.3 |
| Services Index | 48.7 | 48.7 to 48.7 | 49.6 | 48.9 |
Highlights
The June composite PMI rose from its flash reading of 48.5 to 49.2, helped by a substantial bump in the services index. Still, the result is a tick lower than the 49.3 reading from May.
Encouragingly, the services index improved over both the flash and prior months reading to 49.6 in June from 48.9 in May, approaching 50 above which means expansion. With that result, the sector contracted at its slowest rate in 10 months. That helped push business confidence to an eight-month high.
Economic uncertainty is still an albatross around the neck of the services industry. Even so, there are flickers of increased demand and new orders. For now, however, companies are still working thorough order books which lowered backlogs, but at the lowest pace since January.
While encouraging, it's too soon to say the French private sector is back, particularly since the manufacturing sector contracted further in June. Next week is also the deadline set by the US government for a trade deal to avoid further tariffs.
Encouragingly, the services index improved over both the flash and prior months reading to 49.6 in June from 48.9 in May, approaching 50 above which means expansion. With that result, the sector contracted at its slowest rate in 10 months. That helped push business confidence to an eight-month high.
Economic uncertainty is still an albatross around the neck of the services industry. Even so, there are flickers of increased demand and new orders. For now, however, companies are still working thorough order books which lowered backlogs, but at the lowest pace since January.
While encouraging, it's too soon to say the French private sector is back, particularly since the manufacturing sector contracted further in June. Next week is also the deadline set by the US government for a trade deal to avoid further tariffs.
Market Consensus Before Announcement
No change from the flash at 48.5 is the call for the June composite final, down from 49.3 in the May final. No change is expected from the flash at 48.7 for services versus 48.9 in the May final.
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.
