- August flash services PMI 48.4 vs 49.8 expected
- Prior 49.6
- August flash manufacturing PMI 51.5 vs 50.0 expected
- Prior 49.8
- August flash composite PMI 48.8 vs 49.5 expected
- Prior 49.4
The French private sector economy remains weak in August, with another contraction seen in overall business activity. This once again continues to reaffirm that the French economy remains on track for yet another subdued and mediocre quarterly showing as demand conditions remain soft.
The services sector was the main drag, offsetting the better showing in the manufacturing sector in August – which saw production rise for the first time since April. Of note, extreme heat was cited as a reason for lower activity levels. That sees demand conditions fall off further as new orders decreased modestly, extending the current period of falling sales volumes to nine months.
Meanwhile, input price inflation did at least slow to a five-month low. That indicates receding cost pressures, although the rate of increase in output charges was broadly unchanged. And even on the drop, the rate of input price inflation remained above that seen just before the period before the Middle East conflict.
S&P Global notes that:
“While the weather certainly heated up across Europe this summer, France’s economy is barely lukewarm. The flash PMI report revealed another month of frail economic conditions, with some firms, mainly in the service sector, highlighting the extreme heat as a reason for lower activity and demand. There was some renewed vigour in the manufacturing sector, however, as production rose for the first time since April’s stockpile-driven boost, potentially indicating some more stability for factories as inflation in the goodsproducing sector remains on a downward trajectory. That said, inflation in the service sector ticked up for the first time since May as renewed pressures on global oil prices translated into higher fuel costs. Firms’ decisiveness when passing on higher expenses could have implications for the inflation outlook.”
This article was written by Justin Low at investinglive.com.