France July final services PMI 56.8 vs 57.0 prelim

Author: Justin Low | Category: News

Latest data released by Markit - 4 August 2021

  • Composite PMI 56.6 vs 56.8 prelim
The preliminary report can be found here. A slightly weaker revision but it still reaffirms strong activity growth in the services sector for France in July. Markit notes that:

"Although the headline PMI dipped slightly, the data is consistent with activity growing at a strong pace, much like we saw in the previous two months since pandemic-related restrictions have been peeled back. Pent-up demand is considerable, and firms are struggling to meet it, as evidenced by one of the strongest increases in backlogs of work for a decade. This is a good thing in the short-term as it means the economic recovery will have legs to continue through the third quarter and hopefully beyond.

"That said, current conditions have handed businesses an incredible amount of pricing power. While inflationary pressures are not quite as alarming as they are in the manufacturing sector, there's clear spillover effects from the severe supply chain disruptions, as firms cited this as a reason behind July's 34-month high in input costs. In response, firms upped their fees to the greatest extent in a decade. If the price rises we're seeing remain sticky, inflation will no longer be transitory."
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