Courtesy of Mish.
France
Looking for growth in Europe? You won’t find it in France, but for now you can still find it in Germany (for now).
The Markit Flash France PMI shows French private sector output falls at sharpest rate in eight months.
Key Points
- Flash France Composite Output Index falls to 48.0 (48.4 in September), 8-month low
- Flash France Services Activity Index falls to 48.1 (48.4 in September ), 8-month low
- Flash France Manufacturing Output Index falls to 47.6 (48.4 in September ), 2-month low
- Flash France Manufacturing PMI falls to 47.3 (48.8 in September), 2-month low
Summary
The latest flash PMI data signalled a deepening downturn in France’s private sector economy during October. The seasonally adjust ed Markit Flash France Composite Output Index , based on around 85% of normal monthly survey replies, slipped to 48.0, from 48.4 in September. That was its lowest reading since February, albeit indicative of a moderate rate of contraction overall. Faster declines in output were recorded in both the services and manufacturing sectors during October.
Employment in the French private sector fell further in October, extending the current period of contraction to one year. Furthermore, the rate of decline quickened to the sharpest since April 2013. Similarly solid rates of job shedding were registered across the services and manufacturing sectors. Staffing levels were cut in line with reduced workloads.
Outstanding business at French private sector firms fell for the sixth month running, and at the fastest pace since May 2013. Lower backlogs were signalled by service providers and manufacturers alike.
Divergent trends continued to be observed for input and output prices during the latest survey period. Input costs rose for a seventeenth consecutive month, albeit at a moderate pace. Increases were signalled in both the services and manufacturing sectors. Conversely, output prices decreased further in October. The rate of decline in charges was considerable, having accelerated to the sharpest in five years. Firms in both sectors cut their selling prices, citing intense competitive pressures and tough negotiations with clients.
Comment
Jack Kennedy , Senior Economist at Markit, which compiles the Flash France PMI ® survey, said: “The French economy remained stuck in reverse gear in October , as crumbling demand dragged activity lower. New orders fell at the sharpest p ace in 16 months, leading firms to make deeper cuts to output and employment. Companies scrabbled to attract new business by slashing their output prices to the greatest extent in five years, despite a further rise in input costs, underlining the extent of the pressures facing businesses at present.
Germany
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