France’s PMI data for August revealed a stark contrast between the manufacturing and services sectors. PMI Manufacturing fell from 44.0 to 42.1, marking an 8-month low and falling short of the expected 44.6. On the other hand, PMI Services surged from 50.1 to 55.0, significantly exceeding expectations of 50.5 and reaching a 27-month high. This strong performance in the services sector led to a rise in PMI Composite, which climbed from 49.1 to 52.7—a 17-month high and the first sign of expansion since April.
Norman Liebke, economist at Hamburg Commercial Bank, noted that the French economy is likely to grow by 0.5% in Q3, attributing the improvement in economic conditions to the services sector. He pointed out that this positive development can be traced back exclusively to the service sector, where the business activity index rose by nearly five points.
However, Liebke also cautioned that the strong performance in August could be an “outlier”, influenced by the Olympic Games. Meanwhile, the manufacturing sector continues to face challenges, with production declining even more sharply than in July.
