By Le Figaro with AFP
Posted 2 hours ago, Updated 43 minutes ago
French economic activity contracted in August for the third consecutive month, both in services and in the manufacturing sector, according to the provisional PMI index published this Wednesday by the S&P Global agency. The Flash Composite Index, which measures private sector activity, stood at 46.6 in August, the same level as July and one point lower since November 2020.
Activity in the services sector, the dominant sector of the French economy, fell for the third month in a row, to a 30-month low of 46.7 (compared with 47.1 in July). The decline in manufacturing production, which began last summer, continued, with the interim PMI coming in at 45.8. In this sector, however, the contraction is less than in July (44, revised slightly upwards), and it is the highest point in five months. A value above 50 means expansion, while a value below this threshold means contraction.
“A new drop in demand”
S&P Global also notes “a new drop in demand in both sectors“, with contraction rates higher than those of July. Businesses, however, increased their workforce in August, but with job creation at the lowest level since January 2021. Businesses surveyed also indicated a slowdown in price growth in August, with inflation rates of prices paid and prices billed at their lowest levels for twenty years. nine and twenty-eight months respectively.
«Stuck in a rut, the French economy, the second largest economy in the euro zone, again faced major difficulties in the middle of the third quarterobserved Norman Liebke, an economist at Hamburg Commercial Bank, which publishes the index with S&P Global. “Against all odds, and despite hopes for an improvement in the economy, the results of the latest survey thus point to a possible contraction in GDP in the third quarter“, according to him.
Business confidence in business growth over the next 12 months also weakened in August, but remained above the 32-month low recorded in June.