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Strong manufacturing sector in France growth continues into 2018

Staff Writer | February 2, 2018
Strong growth in the French manufacturing sector continued during the first month of 2018.
France Manufacturing
France   IHS Markit France Manufacturing PMI
Output, new orders and employment continued to increase at historically marked rates, despite slowing slightly from December.

Encouragingly, the rate of increase in client demand outstripped capacity enhancements, as evidenced by a sharper accumulation of unfinished work.

In turn, this contributed to the strongest degree of business sentiment since data collection began for this series five-and-a-half years ago.

On the price front, input price inflation intensified and led to a sharper hike in average charges.

The PMI is a composite single-figure indicator of manufacturing performance.

It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.

Any figure greater than 50.0 indicates overall improvement of the sector, while any reading below 50.0 indicates overall deterioration.

The IHS Markit France Manufacturing Purchasing Managers’ Index (PMI ) posted 58.4 in January to signal a further improvement in the overall health of the French manufacturing sector.

Although down fractionally from 58.8 in December, the index signalled one of the steepest improvements in business conditions since the survey’s inception in April 1998.

Growth was recorded in each of the three monitored subsectors, led by intermediate goods.

Underpinning the overall expansion was another marked rise in new orders.

Indeed, the rate of new business growth remained among the sharpest recorded since 2010, despite moderating from December.

Furthermore, the rise in client demand was broad-based across both domestic and foreign markets, with new exports orders also rising at one of the sharpest rates seen for seven years.

Buoyed by a strong intake of new orders, firms continued to expand their workforce numbers during January.

The rate of job creation remained among the most marked in the survey history.

Nevertheless, backlogs of unfinished work accumulated further and at the sharpest pace for over 11 years.

Strong demand, combined with capacity enhancements led to another expansion in output, which in turn contributed to a fifth consecutive rise in post-production inventories.