French private sector output dips as services slump in August
French business activity contracted in August, driven by a services slowdown linked to extreme heat, despite a manufacturing rebound.
France's private sector economy slipped further into contraction this month, according to the latest flash purchasing managers' index (PMI) data from S&P Global. The composite reading, which tracks both manufacturing and services, fell to a two-month low of 48.8 in August, down from 49.4 in July. Any score below 50 signals a decline in activity.
The downturn was led by the services sector, which accounts for the bulk of the French economy. Its flash PMI dropped to 48.4 from 49.6 in July, marking the steepest contraction in two months. Economists had expected a milder slowdown, with forecasts pointing to a reading of 49.8.
Manufacturing, however, provided a counterpoint. The sector's flash PMI rose to 51.5 from 49.8 in July, comfortably beating expectations of 50.0 and indicating renewed expansion in factory activity.
S&P Global attributed the services weakness partly to weather conditions. "The flash PMI report revealed another month of frail economic conditions, with some firms, mainly in the service sector, highlighting the extreme heat as a reason for lower activity and demand," said Joe Hayes, senior principal economist at S&P Global Market Intelligence.
The mixed picture suggests the French economy remains under pressure, with the services slowdown outweighing a manufacturing uptick in the overall assessment.