France’s Private Sector Slowdown Eases in June

France’s private sector remained in contraction during June, but the pace of decline eased significantly, according to the latest S&P Global Flash PMI survey. The Composite Output Index rose to 47.6 from 44.9 in May, indicating that business activity is still shrinking but showing signs of stabilization. Economists viewed the improvement as a positive signal after France’s first-quarter GDP was revised to reflect an economic contraction.

The manufacturing sector showed encouraging progress, with the Manufacturing PMI climbing to 50.7, returning to growth territory. Manufacturing output also improved, while the services sector remained weak but contracted at a slower rate than in previous months. The Services PMI rose to 47.4, marking its highest level in three months.

Despite the improvement, demand remained subdued as new orders declined for a seventh consecutive month and export orders continued to fall sharply. Employment levels stabilized after a significant drop in May, while business confidence improved for the first time since January. Cooling cost pressures and softer pricing trends suggested easing inflation, although uncertainties surrounding shipping routes through the Strait of Hormuz continue to pose risks to the outlook.

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