France’s March manufacturing PMI
According to data provided by Markit Economics, the final Markit France manufacturing PMI (purchasing managers’ index) stood at 53.3 in March 2017 compared to 52.2 in February 2017. It was slightly below the initial estimate of 53.4.
France’s manufacturing PMI for March 2017 was in the expansion zone. A level above 50 indicates expansion in the economy, while anything below 50 indicates contraction. January’s manufacturing PMI showed a strong move, the highest since May 2011. However, in February, its manufacturing PMI showed weaker improvement compared to January.
The strong improvement in France’s March manufacturing PMI was mainly due to the following:
- Production volume and output rose at a higher rate in March 2017 compared to February 2017.
- Export orders and new orders also rose at a stronger rate in March 2017.
- Employment growth also showed improvement in March 2017.
Performance of various ETFs in March
The iShares MSCI France ETF (EWQ), which tracks France’s performance, rose 5% in March 2017. The Vanguard FTSE Europe ETF (VGK), which tracks Europe’s (IEV) (EZU) economic performance, rose 2.8% in March 2017.
The stronger improvement in manufacturing PMI is mainly due to the improvement in domestic as well as international demand. Input cost also continued its upward direction.
The rising manufacturing PMI indicates that the economic activity in the manufacturing sector improved in March. However, the uncertainty about the upcoming election in France is a major concern for the market. Ahead of this election, we might see some nervousness in consumer sentiment.
In the next part of this series, we’ll analyze the manufacturing PMI for Germany in March 2017.