- Before 47.8
- Manufacturing PMI 44.9 versus 46.9 expected
- Before 46.2
- Composite PMI 49.9 versus 48.8 expected
- Before 48.3
The French economy is close to stabilization in April, but it is essentially characterized by two halves. While the services sector has returned to growth, the manufacturing sector is experiencing a deeper contraction this month. But this is the first time in almost a year that service activity has seen at least some expansion. The HCOB notes that:
“The French economy is back on track. The Flash PMI composite index reached its highest level in 11 months, with 49.9 index points almost taking it out of the contraction zone. The only reason for this A surprisingly robust figure is the expansion of the services sector, which saw a rise in demand for the first time since April 2023. The manufacturing sector remains in decline due to a deceleration in activity. Overall, our HCOB nowcast model for the second quarter suggests a recovery in the French economy, driven by the crisis. service sector.
“The French services sector is the workhorse of the economy. Services activity increased for the first time since May 2023, when large protests began to spark negative economic sentiment. The main reason for the expansion was higher demand Because demand was strong in April, work backlogs declined at a slower rate than the previous month.
“French manufacturing production remains moderate, but we expect it to soon follow the path of the services sector. The manufacturing sector, however, is currently delaying the recovery of the overall economy. The production index fell for a month additional, largely offsetting growth in services activity. Weak demand in the manufacturing sector was the main reason for this faster deterioration.
“Prices remain high due to rising wages, energy and oil prices. In particular, producer price inflation re-accelerated in April, remaining clearly above 50. Input prices also reaccelerated compared to the previous month. The labor-intensive services sector was mainly responsible for the rise in prices. Increases in wages and fuel prices were cited as being respectively. the origin of inflation in services and goods According to the Indeed Wage Tracker, wage growth is expected to slow further in the coming months, which should appease monetary policymakers The resurgence of energy prices should. calm down somewhat in the medium term.”
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