| Consensus | Actual | Previous | |
|---|---|---|---|
| Composite Index | 52.7 | 53.1 | 49.1 |
| Services Index | 55.0 | 55.0 | 50.1 |
Highlights
The French service providers experienced a significant increase in business activity in August, the most significant growth since May 2022. An increase in customer numbers primarily drove this growth. In August, the French services PMI increased from 50.1 to 55.0, which indicates that demand has been resurgent following a decline in June and July.
Nevertheless, the pace of employment growth declined, with the majority of new positions being transitory. Business confidence remained low as a result of political uncertainty and a struggling real estate sector. Service providers increased prices at the quickest rate since April, despite the fact that input cost inflation reached a 39-month low.
The French composite PMI also experienced an increase, reaching a 27-month high of 53.1, which was primarily driven by services. However, manufacturing continued to decline, resulting in a modest overall contraction in private sector new business. The positive data on the French PMI takes the RPI and RPI-P to 43 and 42 respectively, showing that the French economy is performing well above market expectations.
Nevertheless, the pace of employment growth declined, with the majority of new positions being transitory. Business confidence remained low as a result of political uncertainty and a struggling real estate sector. Service providers increased prices at the quickest rate since April, despite the fact that input cost inflation reached a 39-month low.
The French composite PMI also experienced an increase, reaching a 27-month high of 53.1, which was primarily driven by services. However, manufacturing continued to decline, resulting in a modest overall contraction in private sector new business. The positive data on the French PMI takes the RPI and RPI-P to 43 and 42 respectively, showing that the French economy is performing well above market expectations.
Market Consensus Before Announcement
No revisions are expected to the flash data.
Definition
The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of around 750 manufacturing and service sector companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global.
Description
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.
