July was a disappointing month or good month for France’s Service Sector Economy, depending on how you look at the recently released number. The Markit France Services Business Activity Index, surveyed by Markit Economics, dropped to its lowest level in sixteen months, giving cautiously optimistic outlooks for France’s service sector.
The Markit France Services Business Activity Index decreased from 56.1 in June to 54.2 in July for France’s service sector. Any number higher than 50 suggests growth in a sector and the higher the number the more jobs that were created in the service sector, in this case the French Service Sector Specifically.
Jack Kennedy, a Makit Economist analyzed the Markit France Services Business Activity Index result to mean that there are softer demand conditions as spending power is weakened, limiting the amount of growth in the French Service Sector. This is obviously due to the continued economic situation that exists in most of the service based economies in the world.
On a positive note, the Markit France Services Business Activity Index was above 50, showing that the French Service Sector is seeing growth, however it was just a few digits over 50, meaning the growth was slow and minimal. The rate of increase is at the lowest level since March of last year, 2010.
On a similar note, the Purchasing Managers’ Index, which is used for the manufacturing sector, also dropped from the previous month. In June it was 52.5, with it dropping down to 50.5 in July, barely above 50, suggesting very slow and small growth in the manufacturing sector.
The Composite Output Index, which measures the entire private sector of the economy also saw a dip in its index number from June to July. Back in June the index read 54.9, in July it had dropped to a 23 month low, 53.2.
New work in the French economy is at the lowest level of increase since late 2009, but the minimal growth did slightly reduce the overall unemployment rate. On a positive side, input costs also decreased, allowing products and services to have a lower cost associated with their production and sale.