Private sector growth in France softens again, but remains marked
Staff Writer |
Private sector growth softened in March according to latest data.
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Nevertheless, at 56.2, down from 57.3 last month, the IHS Markit Flash France Composite Output Index continued to highlight an elevated rate of expansion and one that was markedly higher than the long-run series average.
Rates of expansion remained strong, but softened in both the manufacturing and service sectors, hitting 12- and seven-month lows respectively.
Service providers maintained a sharper rate of growth than their goods producing counterparts.
The expansion was underpinned by a twenty-first consecutive rise in new orders.
In line with the trend for output, the rate of growth moderated from February, but remained marked and substantially greater than the long-run series average.
The slowdown was broad-based by sector.
Encouraged by a strong demand environment, French private sector firms took on additional workers in March, thereby extending the current period of expansion to just shy of a year-and-a-half.
The rate of increase softened from February amid a weaker rise at service providers.
Meanwhile, the rate of jobs growth was unchanged in the manufacturing sector.
Despite enhanced operating capacity, the amount of unfinished work held by French private sector firms continued to rise in March, extending the latest period of accumulation to 25 months.
Moreover, the rate of increase quickened from February and was among the sharpest recorded in this sequence.
The acceleration was driven by the service sector, while a moderation in growth was evident at manufacturers.
Input prices rose for the twenty-fifth time in as many months during March, amid frequent reports of higher raw material prices (including steel and aluminium).
The rate of inflation remained strong and greater than the long-run series average, despite easing for the second successive month.
Inflationary pressures continued to be felt more strongly in the manufacturing sector.
Following a similar trend to input costs, average selling prices rose in March, thereby continuing a trend that has been observed since September last year.
The rate of increase eased from February, but remained firmly stronger than the average for this series.
Charge inflation was broad-based by sector, and far sharper at manufacturers.
Finally, French private sector firms retained a firmly optimistic outlook in March.
The degree of business confidence pulled back slightly from February’s nine-month high, but remained substantially greater than the series average.
Manufacturers were more confident than service providers. ■