French flash PMI lower then forecasts
The latest flash France PMI data signalled that private sector output decreased for the first time in four months during June. The Markit Flash France Composite Output Index, based on around 85% of normal monthly survey replies, registered 49.4, down from 50.9 in May. The latest reading pointed to a marginal rate of contraction.
In the service sector, activity broadly stagnated following two months of growth. In manufacturing, production decreased for the third month running, with the rate of contraction accelerating to the sharpest since April 2015.
Underlying the drop in output was a reduction in the level of new business received by French private sector firms. It was the first fall since March, albeit marginal overall. Whereas service providers indicated that new business was largely unchanged, manufacturers reported a sixth successive monthly drop, with the rate of decline accelerating since May.
Anecdotal evidence pointed to a tough demand climate, with clients often reluctant to commit to new contracts.
Employment in the French private sector fell for the second month running during June. That said, the rate of job shedding was little-changed from the marginal pace recorded in May. Manufacturers signalled a moderate rate of decline in staffing levels, whereas service providers indicated a fractional drop.