France’s Manufacturing PMI rose to 46.4 in August, up from 45.1. However, Services sector presented concerns, declining to a 30-month low at 46.7, with the Composite PMI holding steady at 46.6.
Norman Liebke of Hamburg Commercial Bank noted, “The French economy is facing challenges, potentially leading to a contraction in the third quarter,” he stated.
A noticeable decline in global demand impacts France, with foreign new orders below the desired 50-point expansion mark. Companies have been tapping into backlogs due to the decline in new orders. Liebke also highlighted a subdued growth in employment, the slowest since January 2021.
Notably, a stark contrast is evident in input prices. The services sector saw a surge, primarily due to wage growth, whereas manufacturing experienced a drop, influenced by reduced energy and raw material costs.
A similar trend is showing in output prices too, and “suggests the core rate, where service prices play a crucial role, could prove to be stubborn.”
