France April flash services PMI 58.8 vs 56.5 expected

• Prior 57.4
• Manufacturing PMI 55.4 vs 53.0 expected
• Prior 54.7
• Composite PMI 57.5 vs 55.0 expected
• Prior 56.3

That's a solid beat on estimates as French business activity rises at its quickest pace since January 2018 with both services and manufacturing sectors showing a solid expansion. Demand conditions for services in particular were robust, with the removal of COVID-19 Covid-19 Covid-19 or the novel Coronavirus is a pandemic that has yielded wide ranging economic turmoil and volatility across financial markets in 2020. The first cases of Covid-19 were reported in Wuhan, China in late 2019. Since then, the virus has expanded globally, infecting millions worldwide. The virus has been extremely controversial, namely in the United States, which became heavily politicized during the 2020 presidential election. The Covid-19 pandemic is completely unprecedented in modern ti Covid-19 or the novel Coronavirus is a pandemic that has yielded wide ranging economic turmoil and volatility across financial markets in 2020. The first cases of Covid-19 were reported in Wuhan, China in late 2019. Since then, the virus has expanded globally, infecting millions worldwide. The virus has been extremely controversial, namely in the United States, which became heavily politicized during the 2020 presidential election. The Covid-19 pandemic is completely unprecedented in modern ti Read this Term restrictions helping to increase activity levels.

The only downside remains on price pressures, where output charges were seen rising at the fastest pace on record for a second month running. S&P Global notes that:

"The resilience of the French economy in April may come as a little surprising to many given rampant inflation, escalating geopolitical tensions and on-going supply-chain disruption. The strongest increase in economic output for over four years suggests there was still plenty of COVID catch-up at the start of the second quarter. Indeed, comments from our panel members back this up, with many linking this to an increase in their orders.

“Support for demand also came from clients placing advanced orders and bookings in anticipation of higher prices. This was particularly (but not exclusively) the case in manufacturing, and is important anecdotal evidence that tells us inflation expectations are still rising. Companies are now starting to fear that soon enough, clients will not be so accepting of price hikes. Output charges rose at a series record rate once again in April, surpassing the previous high set in March. Given how rampant inflation is at present, it’s difficult to see sustained post-pandemic recovery efforts offsetting the negative impact from rising prices."