Service sector growth in France remains elevated during January
Staff Writer |
Business activity growth in the French services sector was broadly unchanged from the previous month at the start of 2018, and remained among the steepest recorded for six-and-a-half years.
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The expansion was supported by the sharpest rise in new orders since May 2011, which in turn contributed to a further marked rise in staffing numbers.
Nevertheless, backlogs of unfinished work accumulated at the quickest pace since May last year.
Meanwhile, business confidence remained firmly positive despite a marginal moderation from December.
On the price front, input cost inflation intensified, and fed through to a fifth successive rise in average charges.
The headline seasonally adjusted Business Activity Index posted 59.2 in January.
Up fractionally from December’s reading of 59.1, the latest index reading was consistent with an expansion that remained markedly higher than the long-run series average.
Service sector data suggested that Hotels & Restaurants were the best performing sub-sector during January, followed by Post & Telecommunications companies.
The final seasonally adjusted IHS Markit France Composite Output Index – which covers the combined manufacturing and service sectors – posted 59.6 in January, unchanged from the previous month and down only slightly from November’s six-and-a-half year high of 60.3.
Driving the overall service sector expansion was another sharp rise in new orders, indeed the most marked in over six-and-a-half years.
Anecdotal evidence suggested that high client demand, strong business investment and low interest rates were key drivers of the rise.
Contrary to the trend for output, Post & Telecommunications was the best performing sub-sector.
On a composite basis, new business growth accelerated from the previous month, and was the most marked since April 2011.
Robust demand conditions supported a further marked rise in staffing numbers.
Although easing for the second successive month, the rate of job creation in the service sector remained marked and far greater than the long-run series average.
Hotels & Restaurants was the best performing sub-sector, closely followed by Renting and Business.
Jobs growth also softened marginally at manufacturers.
That said, the rate of expansion remained marked nonetheless. ■