Financial News: France Private Sector Recovers On Services Activity

France Private Sector Recovers On Services Activity

08/22/2024 - 03:52:00 (RTTNews)

(RTTNews) - France's private sector expanded in August for the first time since April driven by the upturn in services activity, flash survey results from S&P Global showed on Thursday.

The composite output index rose to 52.7 in August from 49.1 in July. The score was forecast to remain unchanged at 49.1.

This was the first time since April that the index has posted above the 50.0 threshold and also suggested the strongest expansion since March 2023.

The uplift in private sector output was exclusively driven by services. Services providers benefited from the Olympic Games.

The services Purchasing Managers' Index hit a 27-month high of 55.0 compared to 50.1 in July. The reading was seen at 50.2.

On the other hand, the manufacturing PMI declined unexpectedly to an eight-month low of 42.1 from 44.0 a month ago. The score was forecast to rise to 44.4.

"The French economy will likely grow 0.5% in the third quarter," Hamburg Commercial Bank Economist Norman Liebke said.

At composite level, total new business intakes across the private sector declined for a third successive month in August.

Backlogs of work were depleted further, with both sectors recording lower levels of outstanding business. Quicker declines were seen at both manufacturers and service providers, the survey showed.

The net private sector employment declined during August after a six-month spell of job creation.

French private sector companies' expectations for output for the next twelve months remained positive on balance, although the level of optimism weakened to its lowest in just shy of a year.

Cost pressures in the private sector eased in August. After quickening in July to an eight-month high, the rate of input price inflation softened to a three-and-a-half-year low.

Meanwhile, prices charged for French goods and services rose at the fastest since January.

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