• Prior 58.9
  • Manufacturing PMI 54.5 vs 55.2 expected
  • Prior 55.7
  • Composite PMI 57.1 vs 56.9 expected
  • Prior 57.6

The readings sees the French economic expansion slow down but the services sector remains rather resilient, offsetting the drop in manufacturing activity. The services sector growth is at a two-month low though, with the manufacturing sector growth seen at a seven-month low in May. Of note, weak demand due to higher prices weighed on manufacturing production.

In terms of  inflation  , there was an intensification of price pressures as both input costs and output charges increased at survey-record rates. S&P Global notes that:

“The French economy is showcasing a remarkable degree of resilience amid mounting economic headwinds. Overall business activity rose sharply in May and at a rate that was only slightly weaker than April’s multi-year high. According to our panel members, businesses, particularly in the service sector, enjoyed another boost to their order books as a result of the removal of pandemic restrictions in recent months.

“The picture is more gloomy on the manufacturing side of France. As well as sustained supply-chain pressures and challenging conditions for exporters, rapid inflation is dissuading clients from placing orders. Manufacturing demand was more-or-less stagnant in May, while exports declined. As a result, we saw further evidence of a twospeed economy emerging within France as a resilient service sector continues to mask sluggishness across the manufacturing industry.

“The only real positive was seen in employment data as jobs growth was at its strongest in over two decades. Whether strong hiring trends can be sustained amid rising cost pressures and any further softening in the demandside of the economy remains to be seen. Both input costs and output prices rose at new record rates in May.”