In France, private sector activity bounced back in September, and rose at the fastest pace in more than two years.
The first of the flash purchasing managers’ index (PMI) reports from S&P Global for September showed a strengthening of the eurozone’s second-biggest economy at the end of the third quarter as activity growth returned.
The composite output index, measuring service and manufacturing activity, rose to 51.2 from 48.5 in August. Any reading above 50 points to expansion. This was driven by the services sector, where the business activity index jumped to 51.4 from 48, a 10-month high. The manufacturing PMI dipped to 50.3 from 51.1.
Demand improved, reflecting rising sales activity in the service sector, although employment continued to decline and business optimism weakened further.
Joe Hayes, senior principal economist at S&P Global Market Intelligence, said
The French economy displayed resilience in September, although the durability of this expansion is given new orders barely rose and firms’ own expectations for activity deteriorated. There may also be some payback driving the uplift after the extreme heat seen in August disrupted some business activities, in the service sector.
Nevertheless, these data reinforce the narrative that European economies are weathering the war-induced inflation shock well. The pick-up in the PMI price measures seen in September should however be watched closely as we approach the winter months, as the risk of energy price inflation spreading to other areas of the economy rises.
Input and output prices both rose at quicker rates for the first time since May as rising cost pressures were passed on to clients, the survey showed.