Is France’s Falling Services PMI Affecting Investor Sentiment?



France’s services PMI in March

According to data provided by Markit Economics, the final Markit France services PMI (purchasing managers’ index) weakened again in March 2018. It stood at 56.9 in March 2018 as compared to 57.4 in February 2018. The reading met the initial estimate of 56.8 and was the slowest expansion in services activity since September 2017.

The performance of France’s services PMI in March was affected by the following factors:

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  • Production volume and output slowed in March. Factory output has also witnessed a weaker expansion since October 2017.
  • New business orders and export orders also showed weaker expansion in March 2018 as overseas demand weakened in that month due to the rising concern about the global trade war.
  • Employment in the service sector slowed in the same month.

Some subsectors such as transport and hotels and restaurants showed sharper improvement in their business activity during the month. The rise in domestic demand supported this improvement. However, the overall gradual fall in both manufacturing and services PMI is affecting investor sentiment.

Performance of ETFs in March

The iShares MSCI France ETF (EWQ), which tracks France’s equity market performance, dropped 0.7% in March 2018. However, the Vanguard FTSE Europe ETF (VGK), which tracks Europe’s equity market performance, rose marginally in the same month.

In the next part of this series, we’ll analyze services PMI for Spain in March 2018.


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