- Prior 48.0
- Manufacturing PMI 44.5 vs 46.0 expected
- Prior 46.0
- Composite PMI 46.6 vs 47.8 expected
- Prior 47.2
The downturn in both the services and manufacturing sectors have worsened in France in July. They are now both down to their worst levels in 29 months and 38 months respectively. A further weakening of demand conditions was seen weighing on overall business activity and that's not a good look at how things are going to come along in the months ahead. HCOB notes that:
“The French economy took another hit in July as both the manufacturing and services sectors saw a decline. The drop in new export business was even steeper, reflecting weak global demand as the Chinese economy has not bounced back so far this year as expected.
“All in all, the data signals a noticeable cooldown of the economy, showing the sharpest reduction of business activity since November 2020, which preceded a contraction in GDP.
“Prices continued to increase in July, but once again there was a stark contrast between the manufacturing and services sectors. While manufacturing prices have been falling for some months thanks to declines in raw material costs, service prices continued to increase at a still highly elevated pace. According to anecdotal evidence, input prices were driven by higher labor costs.
“Despite the less than promising state of the French economy, companies were more optimistic than in June. Anecdotal evidence suggests this shift is attributed to recent employment growth, particularly in the service sector. Conversely, sentiment in manufacturing appears more restrained, where firms are pessimistic towards the next twelve months.”