- Prior 48.5
- Manufacturing PMI 49.9 vs 48.0 expected
- Prior 48.2
- Composite PMI 49.8 vs 48.5 expected
- Prior 48.6
Both the services and composite readings are 12-month highs while the manufacturing reading is a 3-month high. That points to the French economy moving closer to stabilisation in August amid some light rays of optimism. Demand weakness remains evident with new orders falling for a fifteenth straight month. However, the pace of the decline was the softest in a year so that's something to take heart in. Meanwhile, employment levels also increased for the first time since November last year. And that's another positive takeaway at least. HCOB notes that:
“France’s Composite PMI remained below the growth threshold in August, reinforcing the persistent trend of economic weakness that has defined the year so far. Although there was a slight improvement in the index compared to the previous month, a clear turning point is still not visible. On a more positive note, both the manufacturing and services sectors saw less pronounced contractions, which could be interpreted with cautious optimism as an early sign of stabilization.
“The services sector reflects the broader economic picture. Business activity continues to lack growth momentum. The current order situation, especially the sharp deterioration in foreign demand during August, offers little hope for a near-term recovery. Service providers remain cautious in their expectations. Price dynamics have remained relatively stable, but input costs are rising faster than output prices, which suggests that margins may come under pressure.
“France’s manufacturing sector continues to feel the strain. Long-standing challenges like weakening international competitiveness and the rise of protectionist policies are shaping a difficult environment. Global supply chains are probably still recalibrating to new tariff regimes, and that’s possibly a reason for noticeably longer delivery times. While the sharp and rapid drop in order volumes seen last month wasn’t repeated in August, the mood among producers has hardly improved. If anything, concerns deepened, with the Future Output Index falling sharply once again.”
