FRANCE DATA: Jul Flash PMI: Highest Since Aug, But Details Weak

Although the French manufacturing and services July flash PMIs were within 0.1 point of consensus estimates, the composite reading was five tenths stronger than expected at 49.6 (49.1). This seems to be due to some inconsistencies with analyst forecast entries - the median services/manufacturing estimates were unchanged even when considering only those that submitted forecasts for the composite reading. 

Abstracting from this, the data shows a partial rebound in manufacturing sentiment to 48.4 (vs 48.4 cons, 48.1 prior), with services little changed at 49.7 (vs 49.6 cons and prior). The 49.6 composite reading was the highest since August 2024. However,  the index remains in contractionary territory and the details of the report appear quite weak.

Key notes from the release:

• "Despite the headline ‘flash’ index picking up, some of the survey’s sub-indices signalled deepening fragility across the eurozone’s second-largest economy. Demand for French goods and services declined at the sharpest pace in three months in July. Sales weakness intensified across both monitored sectors, but particularly in manufacturing, where new orders fell to the greatest degree since February".
• "The steeper drop in overall private sector new orders partly reflected a quicker downturn in exports, which fell at the fastest rate in the year-to-date. Again, weakness was predominately centred on manufacturing".
• "Marked declines in confidence were recorded at both manufacturers and service providers, underlying sector data showed. Companies widely commented on lower budgets, concerns regarding the sales outlook and domestic political uncertainty".
• "With expectations diminishing, French businesses made further cuts to their employment numbers during July"...."lower workforce numbers were exclusive to the
  service sector as factory hiring picked up"
• "July survey data revealed relatively soft inflationary pressures across France, with both input costs and output charges rising at rates which were below their respective long-term averages"