French business activity weaker than expected in August: PMI

Reuters

Published Aug 21, 2020 03:30AM ET

PARIS (Reuters) - French business activity has lost more momentum than expected in August, a survey showed on Friday, as firms worked off backlogs of work built-up during a coronavirus lockdown.

Data compiler IHS Markit said its preliminary purchasing managers index (PMI) fell to 51.7 points from 57.3 in July - far below the average forecast for 57.2 in a Reuters poll of economists.

The reading for the services sector stayed above the 50-point level dividing an expansion from a contraction, but the preliminary PMI reading for manufacturing came in below that level.

The dominant service sector saw its PMI reading for August fall to 51.9 points from 57.3 in July - below a forecast for a reading of 56.3 points.

The manufacturing PMI fell to 49.0 points in August - down from 52.4 in July and below a forecast for 53.7 points.

French business activity had surged after the euro zone's second-biggest economy emerged in May from one of the strictest lockdowns in Europe as firms responded to pent-up client demand.

The August PMI survey indicated that backlogs were no longer growing in the service sector and were growing at a slower pace in manufacturing. Meanwhile, new order flow was stable in services and slowed slightly in manufacturing, the survey showed.