The French economy slowed markedly in August, with private sector activity registering its weakest growth in 17 months, according to an indicator released Monday by S&P Global. The composite index of overall activity, which measures private sector activity, stood at 50.4, against 51.7 in July, the financial information agency said in its press release. An index below 50 indicates a contraction in activity, an index above this limit reflecting an expansion.
S&P Global stresses that the weak growth observed “was exclusively based on that of the services sector, with manufacturing production having in fact fallen for a third consecutive month“. And this expansion of the services sector has slowed compared to July, it is specified. “Activity in the French services sector is gradually approaching stagnation and the survey’s forward-looking indicators raise fears of further deterioration in the economy in the coming months“comments Andrew Harker, economist at S&P Global Market Intelligence, quoted in the press release.
The agency further notes the “first contraction in the volume of new business for a year and a half in the French private sector“. But on a more positive note, employment continued to grow.at a brisk pace“and the business outlook”remained supportive, despite a drop in confidence to a 21-month low“. “Combined with a further deterioration in the economic situation in the manufacturing sector, the weakening performance of the services sector foreshadows a stagnation of the French economy in the third quarter of 2022“says Andrew Harker.