Business activity in France reported lost more momentum than expected in the month of August, as companies worked off the uncompleted work that has been built up during the pandemic lockdown. IHS Markit data said that the preliminary PMI fell from 57.3 in July to 51.7 points, way below the media poll average forecast of 57.2. The services sector readings had stayed above the 50-point threshold in separating contractions from expansion, but the preliminary reading for manufacturing PMI has shown below the level. The service sector which has been dominant, saw the August PMI reading down from 57.3 in July to 51.9 points, sinking quite low below the forecast of 56.3. The PMI readings for manufacturing also dropped to 49.0 from 52.4 in July, while the forecast showed a slight expansion to 53.7 points.
The business activity in France had boosted after one of the strictest lockdowns in Europe was eased in May as companies can do backlogs in responding to previously suppressed demand. The August PMI also signifies that service sectors have no growing backlogs and manufacturing sectors backlogs continue to grow at a slower pace. At the same time, the flow of new order was slowed slightly in manufacturing and stable in the service sector.
French economy in July contracted to a post-war record low of 13.8% plunge in Q2 due to the pandemic lockdown, according to The INSEE statistics agency.
