France PMI July 2022


France: Composite PMI falls to lowest level in over a year in July; raises concerns over a potential recession

July 22, 2022

The S&P Global Flash Purchasing Managers’ Index (PMI) fell to 50.6 in July from 52.5 in June, marking the lowest reading since March 2021. As such, the index moved closer to the 50-threshold, signaling a milder improvement in business conditions from the previous month.

Once again, July’s figure was the result of weaker performances in both the services and manufacturing sectors. A notable decrease in overall demand due to client hesitancy and elevated inflation across both sectors led new business to shrink for the first time in 18 months. Similarly, lower output led firms to reduce their headcounts—resulting in employment levels increasing at the softest pace in six months.

Meanwhile, although input cost inflation eased to its softest growth in five months during July, it still was one of the sharpest rates on record, amid high prices for energy, as well as higher wages for employees. This, in turn, led to another rise in output prices. Lastly, optimism over the coming year rose from the month prior, but it remained more pessimistic in the manufacturing sector due to concerns over the war in Ukraine and inflation.

Commenting on the July’s release, Joe Hayes, senior economist at S&P Global, noted:

“July ‘flash’ PMI data raises further concerns that the French economy is heading towards a recession as data signaled worsening trends across a number of key indicators. […] It’s difficult to imagine the near-term trend improving when anecdotal evidence from panelists continues to portray a picture of worsening health for demand. This is especially the case for the services economy, which is rapidly losing support from the post-pandemic recovery in consumer spending”.

FocusEconomics Consensus Forecast panelists see fixed investment expanding 2.3% in 2022, which is down 0.3 percentage points from last month’s estimate, and 2.4% in 2023.

Author:, Junior Economist

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