July data pointed to a modest rise in construction activity in France, with the rate of growth accelerating to the fastest for seven months.
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The quicker rise was supported by a solid expansion in new business, as well as marked increases in employment and purchasing activity.
Meanwhile, there was further evidence of capacity pressures at suppliers, with average lead times lengthening to the greatest extent since December 2018.
On the cost front, input prices continued to rise, but the rate of inflation eased to the softest in just over one-and-a-half years.
The headline France Construction Purchasing Managers’ Index (PMI ) – which is based on a single question asking respondents to report on the actual change in their total construction activity compared to one month ago – posted above the 50.0 no-change mark for the fourth month running in July, signalling a further expansion of activity in the French construction sector.
At 52.4, up from 51.8 in June, the index signalled a moderate rise that was the quickest for seven months.
At the sub-sector level, the latest expansion was underpinned by growth in both commercial and civil engineering activity.
Civil engineers recorded a solid increase that was their quickest since April 2018, while commercial construction rose moderately and at a rate broadly in line with that registered in June.
In contrast, home builders reported a second successive monthly decline in activity, although the rate of deterioration eased from June and was only marginal overall.
New orders placed with construction firms in France increased for the third month in a row during July.
Moreover, the rate of expansion accelerated to the quickest for just over a year.
Survey participants often noted an increase in calls for tender from their clients.
In response to rising activity levels, firms in the French construction sector continued to increase their staff numbers at the start of the third quarter.
The result extended the current sequence of workforce expansion that began in June 2017.
Notably, the rate of job creation accelerated to the quickest for nine months and was marked overall.
Similar to the trend for employment, firms increased their purchases of raw materials and building products at a faster pace in July.
Moreover, the rate of growth accelerated for the third month in a row and recorded the quickest since June last year.
Meanwhile, cost burdens faced by French building companies increased for the fortieth month in a row during July.
However, the rate of inflation eased from June to reach the softest since the end of 2017.
Anecdotal evidence suggested that strong demand had seen prices rise.
Finally, firms remained optimistic towards the 12-month business outlook in July, supported by expectations of further new order growth.
The degree of optimism was greater than in June and historically marked. ■