PARIS (Reuters) -French business activity almost grew for the first time in a year in August, outperforming expectations, according to a monthly survey showing signs of stabilisation in the euro zone’s second-biggest economy after a sustained period of contraction.
The HCOB France flash purchasing managers index (PMI) for the country’s dominant services sector, compiled by S&P Global, came in at 49.7 points in August, at its highest since August 2024 and close to the 50 point threshold separating growth from contraction.
A Reuters poll forecast for the August flash services PMI stood at 48.5 and the final July figure was also at 48.5
The flash manufacturing PMI for this month increased to 49.9 points – a 31-month high – from 48.2 in July, and also came in much higher than a Reuters poll forecast for a figure of 48.0 points.
The flash August composite PMI – which comprises both the services and manufacturing sectors – reached 49.8 points from 48.6 in July, and again above a forecast for a figure of 48.5 points.
For the first time since last November, employment levels increased, with the rate of job creation at a 16-month high. The pick-up in hiring came despite a pessimistic 12-month outlook.
“France’s composite PMI remained below the growth threshold in August, reinforcing the persistent trend of economic weakness that has defined the year so far. Although there was a slight improvement in the index compared to the previous month, a clear turning point is still not visible,” said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank.
“On a more positive note, both the manufacturing and services sectors saw less pronounced contractions, which could be interpreted with cautious optimism as an early sign of stabilization”.
The French economy grew 0.3% in the second quarter, beating forecasts, helped by a rebound in household spending, according to official data published end July. France’s GDP growth during Q1 stood at 0.1%.
(Reporting by Benoit Van Overstraeten; Editing by Toby Chopra)
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