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Stronger manufacturing fails to offset slower services in France

Staff Writer | October 25, 2016
October’s flash France PMI data indicated private sector output rose at a slightly softer rate, led lower by weaker growth in the service sector and despite manufacturers raising production to the greatest degree for over two-and-a-half years.
France companies
French economy   Markit Flash France PMI
The Markit Flash France Composite Output Index, based on around 85% of normal monthly survey replies, registered 52.2, compared to September’s 15-month peak of 52.7. There was some divergence between the respective trends in output of the two main sectors covered by the PMI survey.

On the one hand, manufacturers raised production to the greatest degree since March 2014. In contrast, service sector activity rose at a notably slower pace compared to September, although growth remained solid overall.

October’s survey data revealed that new business placed with French private sector companies continued to increase during the latest survey period, albeit at a softer pace.

Service companies recorded a modest expansion in new work, whereas manufacturers were able to eke out negligible growth for the first time since December 2015. Notably, manufacturers’ new export orders rose to the most marked degree recorded by the survey since May 2011.

On the employment front, staffing levels were marginally lower for the fifth time in 2016 so far. Both sectors recorded slight drops in employment, although the fall in manufacturing was the lowest recorded in eight months of job shedding.