The growth of the French private sector slowed in March
March 24, 2010 – 1:04 pmGrowth has accelerated sharply in the French manufacturing industry in March but has slowed in services, according to the PMI survey published by Markit Economics.
The composite index – which includes the two sectors – fell to 55.2 in draft form, its lowest level in six months, against 55.6 (final) in February.
The services index, to 53.0 against 54.6, returns to its lowest level since September to mark its fourth consecutive decline since its peak of 60.9 reached in November.
Conversely, the manufacturing PMI index to 56.3 back in cons flash version 54.9 in February, its highest level since November 2006, reflecting an increase in production and order situation as also testified Tuesday l 'INSEE survey in the industry.
Economists polled by Reuters had expected an average manufacturing PMI at 54.7 and a services index to 54.8, the level of 50 marking the border between contraction and expansion.
In industry, companies have reported a significant increase in new orders, particularly for exports to know their rate of growth the highest since December 2006.A number of respondents reported an increase in orders from Asia.
New cases have also increased in services, but in moderate proportions.
EMPLOYMENT fall back
Employment nevertheless fell for the 22nd consecutive month in industry and in services, and an increased pace, driven by cost reductions.
"The preliminary March continue to indicate solid growth at the end of the first quarter," said Jack Kennedy, economist at Markit.
"But a recovery at two speeds, with the manufacturing sector continues to benefit from the inventory cycle and an improvement in external demand, while the dynamics of the recovery has weakened significantly in services from the fourth quarter 2009 ".
The March survey, says he, reinforces expectations of slower growth in the first quarter after rising by 0.6% of GDP over the last three months of 2009, which was the best performance euro area.
"The foundations of the recovery will remain fragile as long as the labor market will remain depressed, which weighs on consumer spending," said Jack Kennedy.
On the price side, the survey indicates a further acceleration of the purchase price in the private sector, the sub-index for reaching a high of 18 months.
This phenomenon is even greater in industry than in services is attributed to higher prices of certain raw materials related to some supply problems.
Despite inflation in prices paid, prices charged continued to decline for the 17th consecutive month, continuing competitive pressures to reduce the pricing power of companies. But the decline in March was the lowest in the current series, is Markit.
The monthly survey of Markit and Company executives and buyers from France (FASC) is conducted with some 750 companies from industry and services. The flash estimates are calculated from 85% of responses.
The final indices will be published on 1 April for the industry and 7 for the services and the composite.
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