Behind the France Services PMI in July

According to data provided by Markit Economics, the July France Services PMI (purchasing managers’ index) stood at 56.0 in July 2017, compared with 56.9 in June 2017, meeting the initial estimate of 55.9.

The France Manufacturing PMI showed an expansion in a service activity in July, though the expansion was slighter than in the previous month. Remember, a level above 50.0 indicates an expansion in economic activity, while anything below 50.0 indicates contraction.

The performance of the France Services PMI in July was mainly due to the following:

• Production volume and output slowed.
• New business orders and export orders showed slower improvement.
• Employment increased in July.

The iShares MSCI France ETF (EWQ), which tracks France’s performance, rose 2.3% in July 2017. The iShares MSCI Eurozone ETF (EZU), which tracks the performance of the Eurozone (HEDJ) (FEZ) (IEV), rose nearly 3.4% that month.

The 2Q17 earnings growth of businesses across different nations of the Eurozone showed solid improvement, and now, many fund managers are optimistic about European equities, noting that now, the European economy is now showing more value than other economies. However, the fall in domestic and international demand hampered the performance of some services PMIs in July.

In the next part of this series, we’ll analyze the Spain Services PMI for July 2017.