The French economy slowed markedly in July as private sector activity virtually stalled, according to a flash indicator released on Friday by S&P Global.
The flash composite index of global activity fell to 50.6 points, its lowest level in 16 months. A rate above 50 marks an expansion of activity, a rate below this limit a contraction.
“This trend is mainly explained by a weakening in demand”, with a decrease in the volume of new business for the first time since February 2021, underlines S&P Global.
“Although the manufacturing sector is already firmly anchored in the contraction zone (…), the trend is now clearly downward in the services sector,” it adds. Thus, he considers “increasing” the risk of recession in the French economy.
Inflation at the heart of the problems
The economy is particularly affected by the repercussions of inflation, which weighs on demand and business costs.
The only positive note is that the S&P Global survey points to growth in new employment in July, with a high rate of job creation, especially in services.
Source: BFM TV
