France: Composite PMI steady in August
The S&P Global Flash Composite Purchasing Managers’ Index (PMI) came in at 46.6 in August, matching July’s reading. Consequently, the index remained below the 50.0 no-change threshold, signaling a continued deterioration in private sector operating conditions from the previous month.
The headline index remained stable as an increase in the manufacturing PMI—up to 46.4 in August from July’s 45.1—offset a decline in the services PMI—down to 46.7 in August from 47.1 in July.
In August, demand conditions continued to worsen in both sectors. Consequently, new orders and output fell. More positively, employment levels rose again, solely thanks to hiring in the services sector. On the price front, inflation continued to decline. That said, notable disparities between sectors remained: Manufacturers faced lower costs, while prices in the services sector continued to rise. Lastly, business confidence cooled in August due to weak order book volumes.
Norman Liebke, Economist at Hamburg Commercial Bank, commented on the release:
“The French economy is stuck in a rut, showing signs of struggle once again. For the third month straight, we’ve seen Europe’s second-largest economy shrinking, as indicated by the HCOB PMIs. Despite hopes of a positive economic outlook, the latest PMI data is throwing a curveball, hinting that we might be headed for a contraction in the third quarter.”