Private sector activity experienced its biggest drop since November 2020 in September, a drop that “mainly reflects an unfavorable environment for demand,” according to the PMI Flash index published on Friday by the firm S&P Global. According to this first estimate, which must be confirmed at the beginning of October, the indicator stood at 43.5 in September, after reaching 46 in August. An index above 50 marks an expansion of activity, while a figure below this threshold indicates a contraction.
The preliminary PMI published on Friday “closes a difficult third quarter for the French economy, as the decline in global activity has continuously accelerated since June,” the statement said. “The pace of growth for this third quarter is approaching stagnation, and our immediate forecast model suggests an increase in French GDP of just 0.2%,” estimated Norman Liebke, economist at the Commercial Bank of Hamburg, which publishes the indicator. with S&P Global. This figure of 0.2% is close to those announced in recent weeks by the main French economic forecasters, such as those of INSEE or the Banque de France.
Risk of a rebound in the unemployment rate in the coming months
Given the weak activity, the twelve-month outlook of the 750 companies surveyed to prepare the preliminary PMI has fallen and is at its lowest level since May 2020. The increase in prices invoiced by companies to their customers has continued to increase , slowing down in September and approaching its long-term average after months of exceptional inflation. On the other hand, prices paid by companies to their suppliers increased more rapidly than in August.
Finally, employment saw “moderate” growth in September, driven by stronger labor force growth in the services sector. But “the sharp drop in activity recorded in September in the services sector suggests an imminent drop in numbers,” warns Norman Liebke, and “therefore, the unemployment rate risks recovering in the coming months,” according to the economist.
Source: BFM TV
