| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Composite Index | 46.8 | 46.8 to 46.8 | 47.7 | 48.1 |
| Services Index | 47.1 | 47.1 to 47.1 | 48.0 | 48.5 |
Highlights
France's services sector fell in October, with the services PMI slipping to 48.0, a 6-month low and the composite PMI dropping to 47.7 from 48.1 in September, signalling a sharper contraction in activity.
Demand continued to weaken, as client hesitancy, political uncertainty, and sluggish sales suppressed new business. This was despite the fall in exports being the slowest since June.
Still, firms increased their workforce in October, with employment rising in anticipation of greater activity. Price pressures cooled in October, with operating costs rising the slowest in four and a half years. Still, prices charged continue to increase, however marginally.
Business confidence, while overall positive, fell compared to September and remained below the long-run average.
October's report highlights a shrinking service economy, struggling with weak demand but still showing some resilience through hiring and cautious optimism for future recovery. This latest update takes the RPI to 32 and the RPI-P to 38, meaning that economic activities are moderately outperforming the expectations of the French economy.
Demand continued to weaken, as client hesitancy, political uncertainty, and sluggish sales suppressed new business. This was despite the fall in exports being the slowest since June.
Still, firms increased their workforce in October, with employment rising in anticipation of greater activity. Price pressures cooled in October, with operating costs rising the slowest in four and a half years. Still, prices charged continue to increase, however marginally.
Business confidence, while overall positive, fell compared to September and remained below the long-run average.
October's report highlights a shrinking service economy, struggling with weak demand but still showing some resilience through hiring and cautious optimism for future recovery. This latest update takes the RPI to 32 and the RPI-P to 38, meaning that economic activities are moderately outperforming the expectations of the French economy.
Market Consensus Before Announcement
No revision expected for composite at 46.8 or services at 47.1 from the flash.
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.
