PMI: Positive services demand, but sticky prices; manufaturing disappoints

The French composite output PMI was higher than expected - almost back to 50 (at 49.9, the highest in 11 months). This was all driven by the services side, with the services index also at an 11-month high and back above 50 at 50.5. The press release points to higher demand being the primary driver here. There is less positivity on the prices side, however, with services prices still looking sticky. Manufacturing looked disappointing across the board, falling to a 3-month low of 44.9.

• "Higher demand was reported as a reason for growth, anecdotal evidence showed. Indeed, the ‘flash’ survey results pointed to a marginal improvement in sales performances across the service sector, thereby ending an 11-month sequence of decline."
• "There was a further expansion in employment across France during April, the third in as many months and one which was the quickest since last July. Sector data revealed this was entirely services-led, however, as factory workforce numbers continued to fall."
• "The rate of input price inflation quickened to a five-month high and was steep overall. Of note, operating expenses for manufacturers rose at the sharpest pace since February 2023. Metals and oil-based products were reportedly up in price, anecdotal evidence showed, while wage increases were cited as the principal factor driving service providers’ costs higher."
• "Consequently, prices charged for French goods and services rose to the greatest extent in three months. This was exclusively driven by services companies, however, which they attributed to general inflationary pressures across the economy."