France’s private sector expanded the most since May 2011, flash data from IHS Markit showed. The composite purchasing managers’ index rose unexpectedly to a 76-month high of 57.2 in September. Economists had forecast the index to drop to 55.0 from 55.2 in August.
“Encouragingly, private sector growth appears to be broad-based, with similar rates of expansion recorded in both the manufacturing and services sectors,” Alex Gill, an economist at IHS Markit, said, RTT News reported.
The manufacturing purchasing managers’ index climbed to 56.0 from 55.8 in the previous month. The reading was forecast to drop to 55.5. Manufacturing production rose to the greatest extent since April 2011.
The rate of growth in service sector activity accelerated in September and was only marginally weaker than May’s near-six-year peak. The services PMI improved to 57.1 from 54.9 a month ago. The expected level was 54.8.
“On the eve of the president’s signature labor reforms on Friday, perhaps the key takeaway of the latest survey is another marked rise in employment,” Gill said. “The current period of jobs growth looks far from over. Business optimism therefore looks well placed to support private sector growth in the coming months, and help facilitate labor market reforms in bringing down the country’s high unemployment rate (currently 9.5%).”
French President Emmanuel Macron, has signed a controversial set of executive orders making sweeping changes to France’s complex labor laws at a highly stage-managed ceremony.
The defiant signing ceremony–televised live from Macron’s desk in the Elysee Palace on Friday–appears to be part of the president’s drive to present himself as a reformer prepared to push through changes.
Macron said his wide-ranging, pro-business reforms were “without precedent” in France’s postwar Fifth Republic.
Two days of protests led by one trade union this month saw demonstrators take to the streets against Macron’s plans, which critics said would benefit business leaders and not workers.
Macron’s changes to labor laws, which will affect all private sector workers in France, include a cap on payouts for unfair dismissals and greater freedom for employers to hire and fire. Employers will be given more flexibility to negotiate pay and conditions with their workers while reducing the costs of firing staff. The government argues this will help France turn around decades of mass unemployment.
Macron’s critics have said his use of executive orders to push through the changes at record speed was monarchical.
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