- Prior 43.1
A slightly positive revision reaffirms a modest bounce back in activity in France's manufacturing sector. The contractions in output and new orders softened considerably in February while business optimism improved to its best since May last year. HCOB notes that:
“The French manufacturing sector is starting to recover, and at a faster pace. Although the PMI was in contraction territory for the thirteenth month in a row, the decline softened noticeably. A smaller shrinking of domestic and international demand helped the Output Index to recover further. With the latest PMI figures, our HCOB Nowcast points to a softer downturn in the manufacturing sector in the first quarter of 2024.
“Consumer goods are leading the recovery in the French manufacturing sector. Output and new orders in this sector are now growing. In the other two sectors – intermediate and capital goods – output contractions softened significantly. The renewed increase in output and new orders in the consumer goods sector led to renewed optimism about future manufacturing output across France. Overall, the future still looks gloomy. Although the corresponding HCOB PMI is clearly below its long-term average, it looks like there might be some hope for the future. We think that domestic demand will pick up over this year, leading to a recovery in the French manufacturing sector.
“The attacks in the Red Sea appear to be relatively harmless in terms of supply chain effects. Although companies reported longer transport times, the delays pale in comparison with the supply chain disruptions in 2021.”
