February 21, 2023 08:23 GMT
Details much more disappointing than headline service beat suggests
- Mixed headline data with services showing a decent upside surprise but manufacturing disappointing here. However, looking into the details the only real bright spots were in employment (not declining) and in prices rising less than expected. The rest of the increase in output was accompanied by declining new orders - even for services companies. So overall the details make this report look disappointing. Markets have reacted to the positive surprise in the services print, but overall this report isn't as positive as that headline beat would suggest.
- "Goods producers reported a ninth consecutive decrease in output during February, with the rate of decline at its sharpest since last November. Manufacturing output was reportedly constrained by continued weakness in demand.
- "Activity at services companies increased for the first time in four months and at the quickest pace since last September."
- "The latest survey data signalled a reduction in new order intakes at private sector companies across France. Both manufacturers and service providers recorded a drop in new business wins during February, although the slump in order books was considerably stronger at goods producers as new sales fell only marginally at services providers. According to anecdotal evidence, demand conditions were adversely impacted by inflation and client hesitancy."
- "The resilient hiring trend continued during February"
- "Output price inflation also eased during February after accelerating to an eight-month high at the start of the year. According to firms, prices charged were raised in an attempt to pass higher costs on to clients."