- Prior 52.5
- Composite PMI 47.2 vs 47.3 prelim
- Prior 51.2
The services sector in France sees its quickest decline since February 2021 as demand conditions stumble further towards the end of Q2. You have to wonder if the ongoing protests are also going to have a more material impact on things in July but we'll see. HCOB notes that:
"After four months of continuous growth, the HCOB PMI for June shows a contraction in the French services sector. It could well be that GDP in France declines in the second quarter, as the service sector accounts for the largest share of French economic output. Our nowcast for France's GDP indicates a 0.9% decline in economic output in the second quarter with both the manufacturing and services sector shrinking.
"The service companies surveyed cited declining new orders both at home and abroad. The decline in new orders was mainly attributed to inflationary pressures, higher borrowing costs and greater difficulty in securing loans. Although business expectations for the coming twelve months remain positive, the corresponding HCOB PMI has fallen by over 4 points and suggests that service sector firms have become less optimistic towards the outlook.
"There is no overly encouraging news from the price front. While both input and output prices in the manufacturing sector declined in June, they continued to rise in the services sector. The companies surveyed attributed the increase in input prices to higher wages. Official negotiated wage growth had amounted to an annual rate of 4.9% in the first quarter of 2023, and the PMI suggests this level could be maintained in the second quarter."
