News Release

Purchasing Managers Index MARKET SENSITIVE INFORMATION

EMBARGOED UNTIL: 0800 (UK Time) 23 November 2011

Markit Flash France PMI

Key points: Flash France Composite Output Index 48.7 (45.6 in October), 2-month high Flash France Services Activity Index 49.3 (44.6 in October), 2-month high Flash France Manufacturing PMI (48.5 in October), 29-month low
(3) (1)

Decline in French private sector output eases in November

The forward-looking new orders to stocks of finished goods ratio in manufacturing remained unchanged from the 31-month low seen in October, pointing to a weak outlook for production in coming months. Correspondingly, purchasing activity was cut further, leading to the sharpest decline in stocks of inputs for 21 months. Meanwhile, service providers future expectations were the weakest since March 2009, with panellists citing the continuing Eurozone debt crisis and next years French presidential elections as factors contributing to uncertainty. Backlogs of work in the decreased for a second November, albeit only nevertheless recorded a employment. French private sector consecutive month in slightly. Companies modest increase in

rises to

(2)

climbs to

falls to 47.6
(4)

Flash France Manufacturing Output Index drops to 47.2 (47.6 in October), 3-month low Summary: French private sector firms reported a decrease in output for the second month running in November. However, the rate of contraction eased from Octobers sharp pace and was modest overall. The Markit Flash France Composite Output Index, based on around 85% of normal monthly survey replies, remained below the 50.0 no-change mark at 48.7, but was up from the two-and-a-half year low of 45.6 seen in the previous month. Underpinning the rise in the headline index was a slower decline in service sector business activity during November. The latest reduction was only marginal and much weaker than in October. In contrast, manufacturing production continued to fall at a solid rate, with the latest drop the sharpest in three months. Trends in activity generally mirrored those for new business in November. Overall levels of incoming new work to the French private sector fell at a slower pace, cushioned by a weaker decline in new business at service providers. However, manufacturers reported the fastest drop in new orders since April 2009, with data pointing to substantial falls in sales both domestically and abroad. Anecdotal evidence suggested that a deteriorating economic climate had resulted in a wait-and-see attitude among customers, while there were a number of reports of lower client spending.
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Input price inflation accelerated from Octobers 23-month low in November to a solid pace, albeit one that remained well below the surveys long-run average. Service providers reported a stronger increase in costs, while manufacturers noted a marginal rise following a fall in the previous month. Similarly, output price inflation quickened to a three-month high, although remained modest overall. Service providers and manufacturers both signalled increased charges in November. Comment: Jack Kennedy, Senior Economist at Markit and author of the Flash France PMI , said: Novembers slower contraction in output offers a degree of reassurance following the alarmingly steep drop-off in October. The overall figures were helped by a more resilient performance by the service sector, where the decline in activity eased to a marginal pace. However, further deterioration was evident in the manufacturing sector, amid reports of weaker demand both within France and

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in export markets. Even in services there was worrying evidence in the form of a fall in future expectations to the lowest for over two-and-a-half years. Based on the last two months PMI figures, Economic growth
PMI 70 65 60 55 50 45 40 35 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 Source: Markit PMI Composite Output Index GDP -1.75 GDP quarterly % change 1.75 1.25 0.75 0.25 -0.25 -0.75 -1.25

there appears to be an elevated likelihood that GDP will contract in Q4. -Ends-

Employment
50 = no change on prior month 70 65 60 55 50 45 40 35 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 Source: Markit Manufacturing Services

For further information, please contact: Markit Jack Kennedy, Senior Economist Telephone +44-1491-461-087 Email jack.kennedy@markit.com Rachel Harling, Corporate Communications Telephone +44-20-7064-6283 Mobile +44-78-2789-1072 Email rachel.harling@markit.com

Note to Editors:
Final November data are published on 1 December for manufacturing and 5 December for services and composite indicators. The France PMI (Purchasing Managers' Index) is produced by Markit Economics and is based on original survey data collected from a representative panel of 750 companies based in the French manufacturing and service sectors. The flash estimate is based on around 85% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data. The average differences between the flash and final PMI index values (final minus flash) since comparisons were first available in January 2006 are as follows (differences in absolute terms provide the better indication of true variation while average differences provide a better indication of any bias): Index (1) France Composite Output Index (3) France Manufacturing PMI (2) France Services Business Activity PMI Index Average difference -0.1 0.0 -0.3 Average difference in absolute terms 0.5 0.4 0.7

The Purchasing Managers Index (PMI) survey methodology has developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the European Central Bank) use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies. Notes 1. The Composite Output PMI is a weighted average of the Manufacturing Output Index and the Services Business Activity Index. 2. The Services Business Activity Index is the direct equivalent of the Manufacturing Output Index, based on the survey question Is the level of business activity at your company higher, the same or lower than one month ago? 3. The Manufacturing PMI is a composite index based on a weighted combination of the following five survey variables (weights shown in brackets): new orders (0.3); output (0.25); employment (0.2); suppliers delivery times (0.15); stocks of materials purchased (0.1). The delivery times index is inverted.

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4. The Manufacturing Output Index is based on the survey question Is the level of production/output at your company higher, the same or lower than one month ago? Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, first published seasonally adjusted series and subsequently revised data are available to subscribers from Markit. Please contact economics@markit.com. About Markit Markit is a leading, global financial information services company with over 2,300 employees. The company provides independent data, valuations and trade processing across all asset classes in order to enhance transparency, reduce risk and improve operational efficiency. Its client base includes the most significant institutional participants in the financial market place. For more information, see www.markit.com About PMIs Purchasing Managers Index (PMI) surveys are now available for 32 countries and also for key regions including the Eurozone. They are the most closely-watched business surveys in the world, favoured by central banks, financial markets and business decision makers for their ability to provide up-to-date, accurate and often unique monthly indicators of economic trends. To learn more go to www.markit.com/economics.

The intellectual property rights to the Flash France PMI provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markits prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (data) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index and PMI are registered trade marks of Markit Economics Limited. Markit and the Markit logo are registered trade marks of Markit Group Limited.

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