France private sector expanded at the fastest pace in eight months in March despite the manufacturing slowdown, survey data from S&P Global showed on Thursday. The flash composite output index unexpectedly rose to an eight-month high of 56.2 in March from 55.5 in February. The score was forecast to fall to 54.3.
The improved picture at the composite level failed to highlight the wide sectoral differences. Services output grew at the fastest pace in four months. Meanwhile, manufacturing production growth slowed notably due to ongoing supply chain problems and the war in Ukraine.
The services Purchasing Managers’ Index climbed to 57.4 from 55.5 a month ago. The expected score was 55.0.
On the other hand, the manufacturing PMI declined to a five-month low of 54.8 from 57.2 in February. The reading was also below the economists’ forecast of 55.0.
The increased level of hesitancy being reported due to the war in Ukraine, means risks to the economic outlook tilt further to the downside, Joe Hayes, a senior economist at S&P Global said. At a time when inflationary risks are building, the economy could therefore be on course for a period of stagflation.