France: Composite PMI slides in June
The S&P Global Flash Purchasing Managers’ Index (PMI) fell to 52.8 in June from 57.1 in May and marked the lowest reading in five months. As such, the index moved closer to the 50-threshold, signaling a milder improvement in business conditions from the previous month.
June’s result was mainly driven by weaker performances in both the services and manufacturing sectors. A decline in manufacturing demand and persistent supply disruptions led production of goods to slide, while downbeat economic conditions led services growth to slow from the previous month.
On the price front, despite the aforementioned supply-chain issues, input cost inflation eased somewhat in June. Nonetheless, optimism over the coming year fell to its lowest level in over a year and a half.
Commenting on the June’s release, Joe Hayes, Senior Economist at S&P Global, noted:
“While a loss of momentum was to be expected as the resumption of economic activities post-lockdown boosted growth, the slowdown has been aggravated by substantial price pressures. This has been particularly aggressive in the manufacturing sector, where output and new orders both declined strongly and for the first time since October last year, serving as a worrying sign for what could be to come for the service sector. […] The slowing economic trend in France is also compounded by a fresh bout of political uncertainty due to the hung parliament result in the national elections.”