France: Private-sector activity improves in July
August 22, 2019
The seasonally-adjusted IHS Markit Flash Composite Purchasing Managers’ Index (PMI) inched up to 52.7 points in August, from 51.9 points in July, and remained above the 50-point threshold that separates expansion from contraction in business conditions.
In August, the services sector saw a quicker pace of expansion in business activity, while the manufacturing sector registered a slight recovery in output. Moreover, the rate of growth of new orders accelerated in both sectors amid increased domestic and external demand. The rate of job creation, meanwhile, was broadly stable from July, while backlogs of work rose at a softer pace. On the price front, input prices rose at a faster pace than output prices in August. All said, overall business sentiment softened somewhat, albeit remained positive.
Regarding August’s PMI, Eliot Kerr, Economist at IHS Markit, noted:
“French private sector businesses posted another solid increase in output during August. Service sector expansion continued to surpass manufacturing growth, reflecting the broader trend seen across the eurozone in recent months. However, in contrast to its peers, economic growth in France has remained solid and the latest set of PMI figures only add weight to the argument that this outperformance is likely to continue in the third quarter.”
Author: Nicolás J. Aguilar, Economist