Bad sign for private sector activity. The PMI index, which compares the volume of activity with that of the previous month, went from 51.2 in May to 47.2 in June. As a reminder, a value below 50 indicates contraction and a value above indicates expansion.
The services sector posted the biggest contraction in activity since February 2021, with the index falling from 52.5 in May to 48 in June, according to data collected by S&P from a panel of 400 French service sector companies.
GDP contraction expected
“Therefore, GDP (gross domestic product) could decline in the second quarter of 2023, our nowcasting model suggests a quarterly decline of 0.9%, reflecting a decline in activity in both the manufacturing and in services,” according to Norman Liebke, an economist at Hamburg Commercial Bank, quoted in the S&P Global press release.
In worrying signs, overall new business volume in June posted its biggest drop since November 2020 and “activity prospects fell to their lowest level in 32 months,” according to S&P Global.
On the other hand, employment growth was maintained in the private sector as a whole, “driven by a new sustained increase in the number of employees in the service sector”.
Source: BFM TV
