S&P Global Economist: Divergent Trends in France's Economy

S&P Global Market Intelligence's Chief Economist, Joe Hayes, noted on May 6 that in April, France's economy was pulled in different directions by the services and manufacturing sectors. According to Jin10, Hayes suggested that the expansion in manufacturing might be short-lived, driven by preemptive orders ahead of expected price increases. On the other hand, increased uncertainty has severely impacted demand in the services sector, leading to weakened economic activity. Interestingly, despite a significant rise in input price inflation since February, service providers have largely maintained stable prices. This reluctance to raise prices further may stem from a desire not to dampen demand in a sluggish sales environment. Businesses might also anticipate that the current wave of inflation will not persist, leading them to tolerate compressed profit margins for the time being.