Private sector output across France was close to stabilizing in July, although the sharp contraction in factory output was slightly offset by a renewed expansion in business activity at service companies. As a result, the combined level of production across both sectors declined slightly at the beginning of the third quarter. The latest HCOB survey data also showed demand for French and goods and services falling further, although employment continued to grow. It is worth noting that business confidence declined for the fourth month in a row, falling to its lowest level since the beginning of the year. As for prices, they are inflation rates for both input and production costs
Prices accelerated. The HCOB Flash France Composite Purchasing Managers’ Output Index (PMI) registered 49.5 in July. While denoting a contraction in private sector production across France, it was generally marginal. It is worth noting that the latest reading of the main index was its highest level in three months, rising from 48.2 in June, and just below the 50.0 threshold that represents stability. The manufacturing sector was the reason behind the decline in private sector economic activity in July, which recorded a monthly decline for the twenty-sixth consecutive month.
In directing. Moreover, the contraction was the fastest since January. Poor sales performance, customer delays and anecdotal evidence show a decline in factory production. On the other hand, commercial activity in service companies increased for the first time since April. The Olympics, as well as the end of the election period
Production: The volume of new business received by French private sector companies decreased at the beginning of the third quarter. Reversing the trend Looking at production, the deterioration in demand in July was primarily due to factories, as manufacturers recorded a sharp decline in new orders.
Latest survey data monthly
Backlogs have been exhausted again, particularly in the goods production sector, where falling demand has pushed companies out of business. And clearing pending orders. This represents a full year of continued decline in backlogs in the French private sector. However, the latest survey data showed another month of job creation, extending the current period of rising employment to six months. However, employment has been limited to the service sector only, and there has been a strong decline in the manufacturing workforce
This means that the overall increase in net headcount was only marginal overall. July survey data indicated further weakness in business confidence across France. While companies remained optimistic about rising activity levels over the past 12 months, the positivity score fell for the fourth month in a row to its lowest level in a year. While hopes
Improving economic conditions, both locally and more broadly, are supporting growth expectations, as some businesses expect the housing market to remain weak to the detriment of their activity levels. In addition, others have pointed out that the Olympics are likely to lead to lower production levels within 12 months on an annual basis. Finally, July survey data indicated a marked intensification of cost pressures across France, led by a sharp acceleration in inputs.
Price inflation among manufacturers. Overall, the increase in operating expenses was the fastest since last November. Higher Commodity and raw material prices are usually associated with higher prices. In contrast, selling fees were increased at the fastest rate for three months as companies sought to shift some of the burden of higher costs to their customers.
PMI flash data
Commenting on the flash PMI data, Norman Lipke, economist at Hamburg Commercial Bank, said: The Olympics are fueling the French economy. Business activity of French service providers increased for the first time in three months. According to anecdotal evidence, this is partly due to the Olympic Games. In addition, companies reported higher production due to the end of the election period, which led to greater certainty. It may seem that the French economy is on the right track towards recovery in the second half of the year, a recovery led by the services sector, but input and output prices still represent a challenge for the French economy with accelerating inflation rates. Rising raw material prices led to a rise in the prices of production inputs and led to the fastest increase in selling prices over the past three months. The French economy is expected to grow by 0.3% in the third quarter, according to the HCOB GDP realtime forecast, because the expansion of the services sector is indicated by the HCOB Flash PMIs. On the other hand, the industrial sector is expected to witness a decline of approximately 1% compared to the previous quarter.
Lower demand and higher input prices appear to have worsened the outlook for French manufacturers over the next 12 months. The index corresponding to future production expectations decreased by about three index points. Overall demand is weakened abroad due to delays from customers. Final July data will be published on August 1 for manufacturing and August 5 for services and composite indices.
The HCOB France PMI (Purchasing Managers’ Index) is produced by S&P Global and is based on original survey data collected from a representative panel of approximately 750 companies based in the French manufacturing and services sectors.
Average differences between flash and PMI values
The average differences between flash and final PMI values (final minus flash) since comparisons were first available in January 2006 are as follows (differences in absolute value provide a better indication of the true variance while mean differences provide a better indication of any bias) and the index scanning methodology has gained Purchasing managers (PMI) have an outstanding reputation for providing the most up-to-date possible indicators of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indicators are widely used by companies, governments and economic analysts
In financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the European Central Bank) use the data to help set interest rates and decisions. Purchasing Managers’ Index (PMI) surveys are the first indicators of economic conditions published each month and are therefore available