France private sector output falls in June

June 23, 2016

The French private sector output is expected to have declined for the first time in four month in June, based on the recent flash PMI data for France. The Markit Flash France Composite Output Index fell 49.4 in June from May’s 50.9, suggesting a marginal contraction.

Activity in France’s service sector has widely stagnated after gaining for two months. Production, in manufacturing dropped for the third continuous month with the pace of contraction accelerating to the highest since April 2015, noted Markit.

French private sector companies registered a decline in the level of new business received. This is the first decline since March, though the fall in marginal overall. Meanwhile, service providers have pointed that new business was unchanged, while manufacturers registered a decline for the sixth consecutive decline. The pace of the fall accelerated from May. Anecdotal evidence indicated towards a challenging demand scenario, with clients usually hesitant to commit to new contracts.

Meanwhile, French private sector employment declined for the second straight month in June. However, the pace of job shedding was slightly changed from the marginal rate seen in May. Manufacturers have hinted at a slight pace of fall in staffing levels, while service providers have recorded a fractional decline.

Outstanding business in France’s private sector rose for the fourth continuous month in June. But the pace of growth was slower than May’s. An increase in backlogs has been reported by service providers; however, manufacturers have hinted at a marginal decline. Meanwhile, France’s private sector’s input prices increased for the fourth consecutive month, but the pace of inflation has decelerated since May to a moderate rate. Both service and manufacturing sectors have registered a rise in cost. Manufacturing sector saw a sharper increase.

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