The latest flash France PMI data signalled an easing of private sector output growth during December.
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The Markit Flash France Composite Output Index, based on around 85% of normal monthly survey replies, dropped to 50.3, from 51.0 in November.
The drop in the headline index reflected a stagnation of service sector business activity, ending a ten-month period of expansion.
In contrast, manufacturing sector output rose at a slightly faster (albeit still modest) rate. New business in the French private sector increased for a fourth successive month in December. However, the rate of growth eased to a marginal pace that was the weakest in that sequence.
Service providers indicated the slowest rise in new work since August, with some panellists citing an adverse impact following the recent terrorist attacks. Manufacturers, by contrast, noted the fastest increase in new orders for 21 months. New export orders received by manufacturers rose fractionally, following a decrease in the previous survey period.
Employment in the French private sector stabilised in December, ending a three-month period of job shedding. Broadly unchanged staffing levels were signalled across both the services and manufacturing sectors.
December data pointed to a further accumulation of outstanding business in the French private sector. That said, the rate of growth remained modest overall.
Service providers signalled a slightly faster increase in backlogs than manufacturers. French private sector firms reported a rise in their input prices for the eleventh consecutive month in December. Although quickening since November, the rate of cost inflation remained well below the survey’s long-run average.
Higher cost burdens at service providers contrasted with a drop at manufacturers (largely reflecting their greater exposure to lower prices for a number of commodities). Output prices across the French private sector fell further in December, with panellists commenting on strong competitive pressures.
The rate of decline in charges was unchanged from that seen in November. Service providers continued to reduce their tariffs at a sharper rate than manufacturers. Business expectations in the French service sector remained positive in December, despite slipping to a three-month low.
Business expansion plans and new product launches were among the reasons cited by panellists anticipating growth of activity over the next 12 months. ■