France’s Manufacturing Rose in June: Macron Magic?
France’s June manufacturing PMI
According to data provided by Markit Economics, the final Markit France manufacturing PMI (purchasing managers’ index) stood at 54.8 in June 2017, compared to 53.8 in May 2017. However, the index didn’t meet the initial index of 55.
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In June, France’s manufacturing PMI was expanding. A level above 50 indicates expansion in the economy while anything below 50 indicates contraction. The strong improvement in France’s June manufacturing PMI from May was mainly due to the following.
- Production volume and output rose at a higher rate in June 2017 than May 2017.
- Export orders and new orders also rose at a stronger rate in June 2017.
- Employment growth also improved for the eighth successive month.
Performance of various ETFs in June
The iShares MSCI France ETF (EWQ), which tracks France’s performance, fell 0.30% in June 2017. The Vanguard FTSE Europe ETF (VGK), which tracks Europe’s (IEV)(EZU) economic performance, fell 0.40% in June 2017. The fall in performance in major indexes of the Eurozone in June 2017 was due to various factors, including the United Kingdom’s general election as well as a hawkish tone from the Bank of England (BoE) and the European Central Bank (ECB).
However, the stronger improvement in France’s manufacturing PMI in June was mainly due to improvements in both domestic and international demand (ACWI). Consumer confidence is also improving gradually after France’s presidential election. The expectation for huge reforms mainly drives investor sentiment.
In the next part of this series, we’ll analyze the manufacturing PMI for Germany in June 2017.