December 6, 2022

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France July flash services PMI 57.0 vs 58.7 expected

2 min read

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.”

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