France’s private sector output likely to have stabilized in July

The recent flash PMI data for France hinted that private sector output in France stabilized in July. The Markit Flash France Composite Output Index rose to 50 in July from 49.6 in June. Service providers hinted at a slight jump in activity in July, third rise in last four months. Meanwhile, manufacturing output dropped for the fourth straight month; however, the pace of contraction alleviated to the slowest in that sequence. According to panellists, consumption trends have been subdued. The Nice attack is expected to have weighed on consumption activity, noted Markit.

New business throughout France’s private sector returned to growth in July, although marginal. Most of the new work was concentrated on the service sector, where growth accelerated since last month. On the contrary, manufacturers recorded that new orders dropped that the sharpest pace in three months. However, new export orders of manufacturers indicated an encouraging trend, rising marginally for the first time since December 2015.

Meanwhile, the French private sector’s employment remained unchanged in July. According to service providers, a marginal increase in staffing levels was seen, whereas manufacturers hinted at a decline for the fifth consecutive month.

Private sector companies in France showed an increase in backlogs of work for the fifth straight month in July. The pace of expansion was little changed from June’s moderate rate. Both the service and manufacturing sectors registered higher levels of unfinished work, with service sectors witnessing the rise at a more rapid rate.

France’s private sector companies recorded a rise in input prices for the fifth straight month in July. The pace of cost inflation was slightly changed from June’s moderate rate.

Higher input prices were hinted throughout both services and manufacturing sectors. Meanwhile, output prices in France’s private sector declined further in July. Markit stated that similar rates of price discounting were indicated in the services as well as manufacturing sectors. Service providers’ business expectations in France dropped to a seven-month low in July. Panellists cited a subdued demand outlook.