Latest data released by Markit - 23 July 2021
- Prior 57.8
- Manufacturing PMI 58.1 vs 58.4 expected
- Prior 59.0
- Composite PMI 56.8 vs 58.5 expected
- Prior 57.4
The readings are a bit of a disappointment as they miss on estimates and fall compared to June but overall business activity is still holding up and keeping thereabouts, so the recovery pace isn't too threatened as of yet to start Q3. Markit notes that:
"It's perhaps slightly disappointing to see the headline composite output figure dip slightly in July, but as the French economy normalises to a state of looser lockdown restrictions, it is not so much of a surprise. Regardless, the PMI pointed to another strong month-on-month rate of output growth, with service providers outperforming their manufacturing counterparts once again.
"Given the sharp increases in new orders that PMI data are signalling, the only hindrance to sustaining strong rates of output growth will be on the supplyside. Backlogs of work were accumulated once again in July as firms struggled to meet unrelenting demand pressures amid looser lockdown measures and subsequent economic recovery efforts both domestically and overseas. This was compounded by continued shortages of inputs and poor freight availability, leading to the fastest rate in cost inflation since May 2011.
"At present, firms in the post-lockdown boom are showing a willingness to pass through higher expenses through their charges. However, if clients start showing less tolerance to rising prices, the economic recovery could be jeopardised."
