- Prior 47.1
- Composite PMI 46.0 vs 46.6 prelim
- Prior 46.6
The downward revisions just paint a worse picture of France's economic contraction in Q3, with the services sector seeing its sharpest fall in two-and-a-half years. New orders are seen falling for a fourth month straight but at least input cost inflation is seen easing to a two-year low. HCOB notes that:
“The French services sector remains under pressure in August. The trend is a trifecta of obstacles: a third consecutive month of dwindling business activity, coupled with a simultaneous decline in new business both overall and abroad. The companies surveyed predominantly point towards two key culprits: the restraint of customer budgets and general caution regarding the economic outlook.
“The weakening of the services sector is reflected in the employment situation. Although services companies hired more staff in August, the pace continues to flatten out, reaching the joint-lowest PMI value since May 2021.
“When it comes to prices, things are still pretty tense. Service providers are facing higher input prices due to elevated energy costs and rising wages, according to the companies surveyed. Once again, businesses were able to nudge up their selling prices, though at the slowest pace since May 2021.
“Despite experiencing gloomy business conditions in August, companies are managing to see a bit of sunshine for the coming months. Companies cited a hoped-for upturn in the overall economy as the reason for the optimism, although risks were reported due to higher interest rates and weakness across the real estate sector.”
