Private sector activity in France appears to be experiencing fluctuations and challenges related to the economic and social impacts related to the pandemic and general economic conditions. The improvement in domestic demand appears to have contributed to supporting economic activity despite the decline in exports, which is a positive indicator of the strength of the domestic market. Continued improvement in employment rates also shows additional opportunities for workers, especially in the service sector.
However, the continued slowdown in growth in some sectors and the decline in exports indicate that there are continuing challenges to be faced. It appears that the rise in raw material costs may have a negative impact on production costs, and in the long run this may affect product costs and prices. Employment in the service sector remains a positive incentive, and it is important to continue supporting this sector and enhancing employment opportunities in it. Concerned authorities must also follow economic trends and take the necessary measures to support growth and enhance confidence in the economy.
Mainly through the local market. Employment rates also rose for the fourth month in a row. As for prices, the rate of input cost inflation accelerated slightly to reach its highest level in six months, despite somewhat higher excise duties. This was among the weakest seen in more than three years and the new decline in services activity ( (which carries the heaviest weight in the Composite PMI) is the one that grabbed the headlines
The index has returned below the critical 50.0 threshold. However, the overall decline in business activity was only marginally much weaker than that seen on average during the ten-month contraction period between June 2023 and March of this year.
Continued employment in the private sector
He pointed out that the expansion in total orders was driven by the local market. Sales performance was particularly strong in the services economy, with new business numbers here rising for the second month in a row. Private sector employment in France continued to improve in the middle of the second quarter, extending the current sequence of job creation that began in February. Service companies were again the only source of employment in May
The decline in employment levels across manufacturing was the weakest in almost a year. Backlogs continued to support French companies’ production volumes in May, with participants in both manufacturing and services industries reportedly working through outstanding orders to offset disappointing inflows of new business. However, the attrition rate was generally modest.
Despite some improvement in sales performance, there was a slight decline in business confidence in the French private sector and the economy in May, with growth expectations falling to their weakest levels in four months. However, the level of positive sentiment was generally strong as companies received encouragement from new customer wins and planned expansions into new markets. Finally, price data showed a slight increase in input cost inflation across France during May. Faster increases in operation
Expenditures in both sectors led to the fastest overall rise in six months. Salaries and some raw materials Anecdotal evidence showed that chemicals and metals amplified cost pressures. However, May survey data pointed to one of the weakest excise duty inflation rates in more than three years.
PMI flash data
Commenting on the flash PMI data,: The French economy will grow in the second quarter thanks to strong domestic demand. The resulting Purchasing Managers’ Index (PMI) fell slightly below 50 in May, and there is no cause for any major concern. Demand rose for the first time in more than a year and employment continues to grow strongly. Economic growth of 0.3% for the second time
While this is strong compared to the last few quarters, it is still slightly below the previous estimate due to worse-than-expected HCOB PMI numbers, down from 0.4%.
The French services sector is showing signs of a sustainable upward trend. This new business sub-index is confirmed, showing the strength of overall demand. Despite the decline in business activity, it has declined only slightly and has a significantly softer pace compared to previous months. Moreover, although employment rates are slowing, they continue to grow at a strong pace.
France’s manufacturing sector is slowly making a comeback. Although the Manufacturing HCOB and Production PMI are both still below 50, they have clearly recovered since their lows in December last year. Improve the French language
Manufacturing also comes with higher price pressures. Output prices rose for the first time since May 2023. The global environment has a significant impact on the French economy. For now, input price increases remain high due to rising wages, but rising energy prices also play a role.
Also, although global trade appears to be gradually recovering, France does not appear to be making commensurate gains as foreign demand has become weaker this month. The Purchasing Managers’ Index (PMI®) survey methodology has earned an outstanding reputation for providing the most up-to-date possible indicators of what’s really going on in the private sector economy by tracking variables such as sales, employment, inventories and prices.
Purchasing Managers’ Index (PMI) surveys are the first indicators of economic conditions
Indices are widely used by companies, governments and economic analysts at financial institutions to help better understand business conditions and guide corporate and investment strategy. in
In particular, central banks in many countries including the European Central Bank use the data to help set interest rates
Purchasing Managers’ Index (PMI) surveys are the first indicators of economic conditions published each month and are therefore available long before comparable data produced by government bodies.
1. The composite production index is the weighted average of the index of manufacturing production and service business activity
2. The service business activity index is the direct equivalent of the manufacturing output index, based on the survey
Question “Is the level of business activity at your company higher, the same or lower than it was one month ago?”
3. The Manufacturing PMI is a composite index based on a weighted combination of the following five survey variables
(Weights are shown in parentheses): New orders (0.3); output(0.25); Employment (0.2); Suppliers’ delivery times (0.15); stock
Purchased items (0.1). The delivery times indicator is reversed.
4. The manufacturing output index is based on the survey question “Is the level of production/output in your company?” Higher, same or lower than one month ago?
