- Prior 50.1
- Composite PMI 53.1 vs 52.7 prelim
- Prior 49.1
The boost in August is likely a one-off, owing much to increased demand from the Paris Olympics. This is evident as the upturn in terms of new business was relatively weak, coming in below the survey average. While input cost inflation eased further, French service providers actually raised their charges more aggressively during the month. The pace of increase was the sharpest since April.
HCOB notes that:
"This is no sustainable level. The French service sector saw a nearly five-point rise in its Business Activity PMI in August, reaching its highest level since May 2022. HCOB Economics thinks this is due to the Olympic Games, which was partially noted by some companies that reported greater new export business. This one-time boost is not evident in other PMI subindices, as only business activity and new orders showed significant improvement. The employment situation improved at a slower pace and outstanding business decreased at a faster rate compared to July.
"French service providers managed to boost their prices. In August, output price inflation accelerated compared to July. It was also noticeable that, despite input costs rising further, the pace of increase slowed to a 39-month low. However, wages remain the main source of cost inflation and were again cited by panellists.
"Although the employment situation is improving across the French service sector, the corresponding HCOB PMI is approaching the neutral threshold. It looks like the HCOB Employment PMI is about to cross the threshold soon, based off the index’s current trajectory, meaning unemployment might go up in the coming months."
