According to current Purchasing Managers’ Index (PMI) data, the French economy expanded significantly in August 2024, owing primarily to the impact of the Paris 2024 Summer Olympics. The event sparked increased activity in a variety of industries, including services, tourism, and construction, contributing to a generally optimistic economic outlook.
The PMI statistics showed robust performance in hospitality, transportation, and retail, which all benefited from the surge of tourists and increased local spending. Architecture also saw a significant increase, owing to infrastructure initiatives associated to the Games. This surge served to balance out the ongoing global economic uncertainty, providing a temporary but significant boost to France’s economic indices during this time.
This Olympic-driven increase in economic activity highlights the larger economic benefits that large-scale events may provide, but it is likely to be an indefinite effect as the Games come to an end.
Overall economic activity in France increased to 52.7, a 17-month high, according to the composite PMI (which includes both services and manufacturing). This jump is largely due to the additional commerce created by the Olympics, which were expected to raise the country’s GDP by 0.3 percentage points. However, analysts have warned that this economic uplift may be temporary, with concerns over a potential decrease in economic momentum post-Olympics, as shown by weakening employment and output estimates.
While the services sector grew, the manufacturing sector had a different tale. The manufacturing PMI dropped to 42.1 from 44.0 in July. This comparison emphasizes the inconsistent recovery of the French economy. The Olympic boost helped to hide some of the ongoing industrial challenges, but the overall picture remains difficult.
The composite PMI, which combines the services and manufacturing sectors, increased to 52.7 in August from 49.1 in July, setting a 17-month high. This suggests that the total economy is rising, however the expansion is largely tilted toward services, with manufacturing trailing behind.
