France’s private sector declines after Olympics – HCOB PMI

France’s private sector economy saw a sharp decline following the end of the Olympic Games, according to the latest HCOB Flash France PMI data for September. The Composite PMI Output Index dropped to 47.4, its lowest level since January, down from 53.1 in August, indicating a renewed contraction in the private sector.

The HCOB Flash France Services PMI Business Activity Index fell to 48.3, a six-month low, while the Manufacturing PMI Output Index decreased to 42.8, an eight-month low. Although the Manufacturing PMI slightly increased to 44.0, it remains in contraction territory.

Recent data reveals a notable reduction in new orders and backlogs of work. The end of the Olympic Games contributed to a decrease in customer numbers, impacting overall business activity. Input prices increased at the slowest pace in nearly four years, and for the first time since February 2021, service sector prices saw discounts.

Employment showed a slight rise after a previous decline, with marginal growth in the services sector but a reduction in manufacturing staffing. Business confidence improved slightly, with a more optimistic outlook for the year’s end.

Tariq Kamal Chaudhry, Economist at Hamburg Commercial Bank, remarked that the robust growth observed in August dissipated by September, underscoring ongoing difficulties in manufacturing and a grim outlook for the sector. He noted that the French economy faces significant growth challenges amid political instability.

Attribution: HCOB Flash France PMI

Subediting: M. S. Salama