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French Manufacturing PMI Improves

James Boston
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French Manufacturing PMI Improves

The French Purchasing Managers Indices (PMI) are looking softer again this month according to the Markit Economics preliminary September data. Both the Composite and Services indicators have fallen but there has been a surprising pick up in the Manufacturing data. At 48.8 the French Manufacturing PMI still remains in contractionary territory but it has, at least for now, stemmed the slide, last month’s number fell to 46.9 and there was an expectation for a moderate pick up to 47.0 today.

More surprising than the turnaround in the Manufacturing sector however is the unexpected drop in the Services index. So far this year the Services sector has proven stable, even somewhat expansionary in France, today’s reading of 49.4 has therefore disappointed markets that were anticipating a level above 50.1, the August final number was 50.3. This all results in the Composite PMI slipping further into contraction, it is now reading at 49.1 compared to 49.5 last month.

There is further grim news for the Eurozone’s second largest economy this morning in the form of final Q2 GDP figures. It has been confirmed that once again France has failed to expand it’s economy as a growth reading of 0.0% manifests for the second quarter in a row. This implies that France has only delivered economic growth of 0.1% over the twelve month’s to the end of the second quarter, this is a slippage from the same reading at the end of Q1 which showed 0.8% expansion and although indicators pointed to a falling growth rate it was thought that this would stabalise around the 0.3% level.

Despite the lack of any real recovery being evident in the French economy there is still a reasonable robustness in the latest Business Confidence numbers. Today’s latest update sees this index stable around the 96.0 level.

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