Is EU Political Uncertainty Affecting France Manufacturing PMI?

France’s manufacturing PMI in May 2018

According to data provided by Markit Economics, the final Markit France manufacturing PMI saw an improvement in May. It stood at 54.4 in May as compared to 53.8 in April. The PMI figure didn’t beat the preliminary market estimates of 55.1.

Is EU Political Uncertainty Affecting France Manufacturing PMI?

The performance of France’s manufacturing PMI in May was mainly due to the following factors:

  • Production volume and output rose at a marginally higher rate in May as compared to April.
  • New business orders and export orders witnessed some weakness in May.
  • The employment growth in the manufacturing sector also witnessed a marginal improvement in the same month.

The overall Eurozone economy showed some nervousness in May. The rising political uncertainty in Italy and Spain affected the overall consumer sentiment in that month. Major indexes of the Eurozone also showed some nervousness in the same month due to the uncertainty. Plus, the uncertainty hampered export orders as well as domestic demand in France as well as the Eurozone economy.

Performance of various ETFs in May

The iShares MSCI France ETF (EWQ), which tracks France’s performance, fell 2.6% in May. The iShares MSCI Eurozone ETF (EZU), which tracks the performance of the Eurozone (IEV), fell 3.5% in the same month.

In the next part of this series, we’ll analyze Germany’s final manufacturing PMI in May 2018.