Final French Services PMI: Analysis and Implications

The Final French Services PMI is a vital economic indicator that helps measure the performance of the services sector. This indicator provides a comprehensive overview of economic activity in France. Through it, one can gain an accurate understanding of the growth and recession trends in the services sector. In this article, we will review the importance of the French Services PMI and analyze its implications, in addition to its impact on the French economy at the present time.

German Manufacturing PMI Preliminary Rises to 45.4 in May vs. 43.1 Expected

The preliminary business activity report published by the HCOB Bank Survey on Thursday showed that the pace of contraction in the German manufacturing sector slowed in May, while the services sector outperformed.

The HCOB Manufacturing PMI came in at 45.4 this month, improving from 42.5 in April.

Meanwhile, the services PMI rose to 53.9 in May from 53.2 in April, above the market consensus forecast of 53.5 for the period. The index hit an 11-month high.

The preliminary German composite output index from HCOB came in at 52.2 in May, versus 51.0 expected and 50.6 in April. The index hit a yearly high.

Economic activity in the euro zone stalled last month as a slowdown in the bloc’s dominant services sector offset a deeper contraction in manufacturing, a survey showed on Monday.

The euro zone composite PMI, compiled by S&P Global and seen as a good gauge of economic health, fell to 50.2 in July from 50.9 in June.

It barely topped the 50 mark that separates growth from contraction, but was slightly above a flash estimate of 50.1, marking the fifth straight month in positive territory.

“The eurozone economy is growing at a slower pace in July,” said Cyrus de la Rubia, chief economist at Commerzbank Hamburg.

Prices rose at a slower pace in July than in June.

In a sign that a turnaround is not imminent, overall demand across the region fell for a second straight month — and at a faster pace than in June. The composite new business index fell to 49 from 49.4.

The decline came despite companies raising prices at a slower pace in July than in June. Inflation in services — which the ECB closely monitors — slowed, with the industrial producer price index falling to 52.9 from 53.5.

That was the lowest since May 2021 and could give the ECB room to ease monetary policy further.

After cutting interest rates broadly in June, the ECB left its deposit rate at 3.75 percent last month, but is expected to cut it twice more, possibly in September, according to a survey by

French services sector sees a rebound

In France, the country’s dominant services sector rebounded in July, helped by business activity around the Olympics.

The final services PMI rose to 50.1 in July from 49.6 in June, broadly in line with a preliminary reading of 50.7.

The final composite PMI, which combines data from the services and manufacturing sectors, rose to 49.1 from 48.8 in the previous month.

The Olympic Games, which run from July 26 to August 11 in Paris, have given a boost to the services sector, said Norman Lipke, an economist at Commerzbank Hamburg.

“The Olympic Games are a boost to the French economy. According to the evidence, there are companies for which the Olympics generate unusually high business activity in July. However, this means that business activity could decline in September when the Olympics end.

If the services sector stumbles, the entire economy could slide

In addition, the reduced uncertainty due to the end of the election period has led to increased activity levels,” he continued, referring to the parliamentary elections in France that ended on July 7.

“In the third quarter, the French economy could grow in the range of 0.5 percent to 0.6 percent due to the Olympic Games and stronger growth in the services sector, which we may also see in the August PMI numbers,” he said.

German services sector slows

In Germany, growth in the services sector slowed for the second month in a row in July in another sign that Europe’s largest economy is losing momentum.

The final services PMI fell to 52.5 in July from 53.1 in June, although it was slightly above the flash estimate of 52.0 and above the 50 mark that separates growth from contraction for the fifth month in a row.

“If the services sector faltered, the entire economy could slip into recession as manufacturing continues to contract sharply. Sadly, recession is no longer a distant possibility,” he said.

A technical recession is defined as two consecutive declines in gross domestic product (GDP) in a quarter. The German economy unexpectedly contracted in the second quarter, sparking recession fears.

However, businesses’ expectations for growth prospects in the year ahead improved slightly, albeit only partly reversing the decline seen in the previous month.

On the inflation front, average prices charged by services firms posted their slowest rate of increase since April 2021, though they were still high compared to pre-pandemic norms, according to the survey.

The composite Purchasing Managers’ Index (PMI), which includes services and manufacturing, fell to 49.1 in July from 50.4 in June, slightly higher than the flash reading of 48.7 but still slipping into contraction territory.

Related Articles