Is France’s Services PMI Impacting Business Conditions?

France’s services PMI in February

According to data provided by Markit Economics, France’s final services PMI (purchasing managers’ index) was weaker in February—compared to January. The PMI was 57.4 in February—compared to 59.2 in January. The figure didn’t meet the initial estimate of 57.9.

Is France’s Services PMI Impacting Business Conditions?

The performance of France’s services PMI in February was mainly due to the following:

  • The production volume and output showed the slowest expansion since October 2017.
  • New business orders rose moderately in February.
  • The employment in the service sector showed a stronger improvement in February.

Among various sectors in the service industry, postal, telecommunication, and hotels and restaurants posted improved activity.

Performance of ETFs in February

The iShares MSCI France ETF (EWQ), which tracks France’s equity market’s performance, dropped 5.1% in February. Similarly, the Vanguard FTSE Europe ETF (VGK), which tracks Europe’s (N100-INDEX) equity market performance, fell 6.1% in February.

France’s manufacturing PMI also had a weaker performance in February. The gradual fall in manufacturing and services activity is a major concern for the economy. Rising concerns about the Eurozone’s geopolitical and political environment impacted the economic activity and business sentiment in the Eurozone’s economy.

Next, we’ll analyze how Spain’s services PMI performed in February.