France’s flash composite PMI slightly higher in May, private sector output growth accelerates

The Markit Flash France PMI for May was slightly higher than April’s index. The flash PMI data hinted that growth in France’s private sector output accelerated to a seven-month high in May. However, the overall rate of growth was moderate. The Markit Flash France Composite Output Index rose to 51.1 in May from previous month’s 50.2. France’s manufacturing and services sectors witnessed contrasting trends, according to Markit. Services activity growth accelerated to the most solid levels in seven months, whereas manufacturing output growth slowed for the second consecutive month. It fell at the sharpest rate in more than one year.

French private sector companies receiving new business rose for the second straight month in May. Furthermore, the pace of growth accelerated somewhat to six-month high. Service providers registered additional increase in new work, although at a slower rate than the one in April. Meanwhile, new orders declined in manufacturing; however the pace of decline softened from that of April’s. New export orders also fell at a pace slower than the one seen in April.

Meanwhile, private sector companies in France signalled another slight increase in employment this month. Job creation was focused on the service sector. However, employment in manufacturers indicated decline. The contraction rate remained the same since April. France’s private sector’s input prices rose for the third consecutive month. However, the inflation rate continues to be lower than the survey’s historical average despite accelerating to a 10-month high, noted Markit.

Input costs in French service sector grew at the most solid rate for 21 months, whereas manufacturers hinted at an additional decline in average purchasing costs. Meanwhile, private sector firms recorded additional decline in output prices in May; however, the recent decline was the least in eight months. Service providers’ business expectations continue to be upbeat in May, in spite of declining to a five-month low.