France July final services PMI 50.1 vs 50.7 prelim

• Prior 49.6
• Composite PMI 49.1 vs 49.5 prelim
• Prior 48.8

It’s a slight improvement to June, even with the downwards revision to the July figures. New business continues to fall while business confidence hits the lowest for the year, which is a major setback considering that all of this should have at least been underpinned by the Olympics. HCOB notes that:

“The Olympic Games are boosting the French economy. According to anecdotal evidence, there are companies for which
the Olympic Games are generating unusually high business activity in July. This does, however, mean that business activity
might drop in September when the Olympic Games are over. Additionally, lower uncertainty due to the end of the election
period increased activity levels. In July, business activity edged higher, with the respective index at 50.1, slightly above the
expansion threshold. In the third quarter, the French economy might grow in the ballpark of 0.5% to 0.6% because of the
Olympic Games and due to stronger growth in the service sector, which we also might see in the August HCOB PMI figures.

“French service providers are turning less optimistic for the upcoming twelve months. This is partially due to unusually high
activity at present because of the Olympic Games, meaning firms are expecting lower sales and activity once the event has
finished. Accordingly, employment growth softened further to a five-month low.
“Prices still pose a risk. In July, input and output prices increased at a faster rate compared to the previous month. Input
prices accelerated due to salary increases on a broader scale, while some companies remarked on broad-based inflationary
pressures. Accordingly, selling prices rose as companies passed on the higher input prices.”

This article was written by Justin Low at www.forexlive.com.