- Services PMI 49.6 vs 48.3 expected and 55.0 prior.
- Composite PMI 48.6 vs 47.4 expected and 53.1 prior.
Key findings:
- French services economy ends third quarter with marginal contraction.
- New orders fall slightly and firms make strong dent to backlogs of work.
- Input cost inflation sinks to 42-month low; output prices unchanged.
Comment:
Commenting on the PMI data, Dr Tariq Kamal Chaudhry, Economist at Hamburg at Hamburg Commercial Bank, said:
"The Olympic euphoria has faded: Following the conclusion of the Olympic and Paralympic Games, the service sector has lost its growth momentum. The HCOB PMI for services dropped sharply in September, falling back into contraction territory at 49.6 points. Declining customer numbers, reduced willingness to spend, and uncertainty were cited by surveyed companies as the main reasons for the downturn in activity.
French service providers continue to struggle with high costs. Although the rise in input costs has slowed since the beginning of the year, weak demand has not been enough to bring prices down. The gap between input costs and output prices remains, indicating that increased costs have only been partially passed on. Some service providers reported offering discounts through promotions in an effort to boost sales.
The outlook for French service providers remains mixed. While order volumes at home and abroad shrank, companies are surprisingly more optimistic about future activity. The corresponding index saw a significant rise, reaching its highest level since July 2022. This confidence is partly attributed to recent ECB rate cuts. As a result, employment remains on an upward trajectory."
