Latest data released by Markit - 24 July 2020
- Prior 50.7
- Manufacturing PMI 52.0 vs 53.0 expected
- Prior 52.3
- Composite PMI 57.6 vs 53.5 expected
- Prior 51.7
That's a solid beat in terms of the headline reading but it is important to remember the context in which it is calculated. The services print is derived from just one key question i.e. how is your business doing this month compared to last month.
And given that lockdown measures are eased and virus fears are receding, a general improvement is expected but this tells us little about the actual level of activity. Meanwhile, the manufacturing print is seen steadying but holding in expansion territory.
It is encouraging that conditions are seen picking up - both services and composite readings are at a 30-month high - but let's see if that can be maintained for the most part of 2H 2020, especially when the labour market starts to get back on its own feet.
Markit notes that:
"The July PMI figures pointed to strong growth in French private sector business activity, confirming that the economy has entered its recovery phase following the COVID-19 lockdown. The results for new orders suggest that domestic demand is finally beginning to recover with more and more businesses reopening and consumers starting to adopt some of their former spending habits.
"Going forward, a steady rebuilding of demand should give businesses the confidence to start hiring more staff and this will further aid the economy in returning to pre-coronavirus levels of output."
