The seasonally adjusted Markit Flash France Composite Output Index, based on around 85% of normal monthly survey replies, posted 51.4, up from 50.2 in August. Growth was broad-based across the manufacturing and service sectors, with the pace of expansion marginally sharper in the former (where it reached an 18-month high). Service providers reported a slightly faster rise in activity than in August. New business in the French private sector increased in September, following a fractional decline one month previously.
Growth of new work was centred on the service sector, with manufacturers indicating a slight reduction in new orders (albeit slower than in August). New export orders received by manufacturers were unchanged on the month. Employment across the French private sector decreased in September, following no-change in the previous month. Moreover, the rate of job shedding was the fastest in ten months. Service providers signalled a sharper rate of job shedding than manufacturers.
A number of panellists indicated that they had chosen not to replace voluntary leavers. September data signalled that backlogs of work across the French private sector increased for a tenth consecutive month. That said, the pace of accumulation remained marginal overall. Similar rates of growth were recorded across the manufacturing and service sectors. Input prices faced by French private sector firms decreased for the first time in eight months during September, albeit marginally overall. Service providers indicated broadly unchanged costs, whereas manufacturers reported a drop for the first time in six months (and the sharpest fall since February).
There were reports from panellists of lower prices paid for metals and oil-related items. French private sector firms reported a further decrease in output prices during September, in line with the trend seen since May 2012. The rate at which charges were lowered was slightly shaper in the manufacturing sector than in services. Anecdotal evidence linked price cutting to strong competitive pressures. Business expectations in the French service sector remained positive in September, with firms on balance expecting activity to rise over the coming 12 months. However, the degree of confidence dropped markedly to the lowest for 11 months.
