France Private Sector Contraction Eases in July

The S&P Global France Composite PMI rose to 49.4 in July 2026 from 47.2 in the previous month, and slightly below market expectations of 49.6, signaling the softest contraction in private sector activity in five months, though remaining below the 50.0 threshold for a seventh consecutive month. Demand for French goods and services broadly stabilized, supported by a renewed increase in domestic orders that helped offset a further marked decline in export business. Business activity continued to edge lower but at only a marginal pace, while firms cleared outstanding work more quickly even as employment contracted at a faster rate. Meanwhile, inflationary pressures eased broadly across the private sector, with slower increases in both input costs and output charges. Looking ahead, business confidence improved further, although optimism remained historically subdued amid concerns over the political environment and higher interest rates.

France's S&P Global Flash Composite PMI rose to 49.6 in July 2026 from 47.2 in the previous month, signaling the softest contraction since the Middle East conflict began in February. The improvement was driven by the services sector, where activity rose to a seven-month high of 49.8 from 46.8 in June, supported by the first increase in demand since November. In contrast, manufacturing activity fell to 48.8 from 49.1, reflecting softer demand conditions. Meanwhile, private-sector employment fell for a third straight month as firms remained reluctant to hire. In addition, growing spare capacity was evident across France's private sector in July, with backlogs falling for a fourth straight month. On the price front, inflationary pressures eased, with both input costs and output prices rising at slower rates. Lastly, business confidence remained subdued, with the Future Output Index remaining well below its long-term average.

The S&P Global France Composite PMI rose to 47.2 in June 2026 from 44.9 in May, signaling the weakest contraction in private sector activity in three months, although it remained below the 50.0 threshold for a sixth consecutive month. Business activity continued to decline across both the manufacturing and services sectors, but the pace of contraction eased from May's 28-month low. New orders also fell for a sixth straight month, though the decline softened to its slowest rate in three months. Meanwhile, employment edged lower only slightly as manufacturing firms resumed hiring, helping to offset continued job cuts elsewhere. On the price front, cost pressures eased further but remained historically elevated, suggesting that inflationary pressures continued to weigh on businesses even as they moderated from recent peaks. Looking ahead, business confidence rebounded from a one-and-a-half-year low, reflecting improved expectations for future activity despite the ongoing downturn.