France composite PMI rises to 18-month high in December, points to solid rate of growth

Composite  Purchasing Managers’ Index (PMI) rose to 28-month high during the period of December, pointing to solid rate of growth in the economy. December’s flash France PMI data indicated private sector output rose at a sharper pace. Stronger growth was registered in both the manufacturing and service sectors, with the rate of expansion the most marked in the former.

The Markit Flash France Composite Output Index, based on around 85 percent of normal monthly survey replies, registered 52.8, compared to November’s reading of 51.4. The latest reading pointed to a solid rate of growth that was the best in a year-and-a-half.

Underpinning the expansion was a further rise in service sector activity, the sixth in as many months. Moreover, the rate of increase was the most marked since September. Furthermore, the latest rate of growth was the sharpest in 67 months.

New business received by French private sector companies increased in December, thereby continuing a trend that has been evident since July. The rate of growth was the sharpest for 18 months and marked overall. A rise in the level of new work was recorded at service providers and good producers for the tenth and third month respectively.

Employment across the French private sector increased for a second successive month in December. Private sector companies in France were faced with a further rise in input costs during December. Finally, service sector business expectations remained positive in December. Moreover, the degree of optimism was the most marked since March 2012.

"Encouraging signs for France as the country seeks to combat a high level of unemployment," said Alex Gill, Economist, IHS, Markit.