France’s private sector stabilises, outlook remains gloomy – PMI

France’s private sector showed signs of stabilisation in August after months of contraction, with business activity broadly unchanged and employment rising for the first time since November, a survey showed on Thursday.

The HCOB Flash France Composite PMI Output Index rose to 49.8 in August from 48.6 in July, its highest level in a year but still below the 50 mark that separates growth from contraction.

Hiring reached a 16-month high as firms added both permanent and temporary staff, though weak demand persisted. New orders fell for the 15th straight month, albeit at the slowest pace in a year, while foreign sales declined at a reduced rate.

Cost pressures intensified, with input inflation hitting a six-month high on rising wages and raw material prices, prompting firms to lift selling prices for a third month in a row.

Business confidence turned pessimistic for the first time since late 2023, driven by concerns over demand and ongoing headwinds in manufacturing.

“Although there was a slight improvement in the index compared to the previous month, a clear turning point is still not visible,” said Jonas Feldhusen, junior economist at Hamburg Commercial Bank.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser