France's Services Sector Soars to Highest Level in Over Two Years - Business Survey Reveals
In a recent business survey, France's services sector experienced its most robust expansion in over two years, driven by the Olympics and a modest increase in demand. The HCOB France Services PMI Index surged to 55.0 in August, up from 50.1 in July, signaling significant growth in activity. Economist Norman Liebke attributed this jump to the Olympic Games, but cautioned that it may not be sustainable in the long term.
Despite the overall growth, the pace of job creation slowed for the fourth consecutive month, with the employment subindex edging closer to the neutral level. Input cost inflation reached a 39-month low, but service providers raised their charges more aggressively, leading to an acceleration in output price inflation. Wages were identified as the main source of cost inflation by Liebke.
New business inflows showed signs of recovery in August, with domestic orders driving the increase as business from foreign customers continued to decline. However, business confidence remained subdued due to political uncertainty, leading to a decrease in backlogs of work.
The HCOB France Composite PMI Index, which includes both manufacturing and services, rose to 53.1 in August, solely driven by the strong performance of the services sector.
In conclusion, the latest data indicates a positive trend in France's services sector, with growth in activity and new orders. However, challenges such as slower job creation and political uncertainty continue to affect business confidence. Understanding these trends can help individuals make informed decisions about their investments and financial planning.