France PMI Manufacturing dropped from 51.4 to 49.6 in July, below expectation of 50.6. That’s the lowest level in 20 months. PMI Services dropped from 53.9 to 52.1, below expectation of 52.7. That’s the lowest level in 15 months. PMI Composite dropped from 52.5 to 50.6, a 16-month low.
Joe Hayes, Senior Economist at S&P Global Market Intelligence said: “July ‘flash’ PMI data raises further concerns that the French economy is heading towards a recession as data signalled worsening trends across a number of key indicators. The level of output was up only marginally from June and solely reflected activity growth at services firms. The manufacturing sector is already in a steep downturn, with production levels falling at the fastest rate since the initial phase of the COVID-19 pandemic in the first half of 2020. The growth trend in the service sector meanwhile worsened further, and momentum is clearly to the downside here.
“Demand is being adversely impacted by the intense inflationary environment, with clients reluctant to place orders at these elevated prices. Consequently, new business fell for the first time since February 2021. It’s difficult to imagine the near-term trend improving when anecdotal evidence from panellists continues to portray a picture of worsening health for demand. This is especially the case for the services economy, which is rapidly losing support from the post-pandemic recovery in consumer spending.”
