According to the business leaders surveyed (around 8,500 companies and establishments surveyed between 22 July and 5 August), activity grew at a moderate pace in manufacturing and market services, and held up in construction in July. In manufacturing, growth was weaker than forecast the previous month, while the slowdown in services was largely expected.
Following the technical catch-up in June, industrial production rose moderately while remaining robust in sectors linked to investment in technology, energy and defence. In market services, activity remained slightly positive, boosted by vehicle repairs, accommodation and publishing, particularly software publishing. In construction, the overall resilience masked a slowdown in structural works, while finishing works picked up.
Cash positions remained close to normal levels in industry, with significant sectoral disparities, and remained generally unfavourable in market services despite a slight improvement.
Business leaders expect activity across the three main sectors to pick up in August. Industrial production is expected to rise across all sectors, while the construction sector is set to benefit from a rebound in structural works. In market services, growth is expected to be more moderate.
Increases in raw material prices and selling prices slowed in July. This easing of the rises observed and forecast for August could indicate that a significant share of the pass through to selling prices of the rise in input costs that occurred in the spring has already taken place. Finally, the resumption of hostilities in the Middle East in early July has not, at this stage, led to a further widespread increase in input costs. Uncertainty continues to ease across the three major sectors.
Based on the survey results, supplemented by other indicators, we estimate that GDP should grow by 0.2% in the third quarter. However, this forecast remains subject to considerable uncertainty, given the limited information available at the start of the quarter and the still-uncertain outlook regarding weather conditions and the situation in the Middle East.
