- Prior 45.3
It's a slight revision lower and although this is an improvement to April, French manufacturing remains relatively subdued. Weak demand conditions are still proving to be a drag in that regard. On the price front, French manufacturers responded to cost pressures by raising their own selling prices, the first time in a year. HCOB notes that:
"The French manufacturing sector might see a recovery soon. The HCOB Manufacturing France PMI for May improved by more than one index point to 46.4, but still remained deep in the contraction zone. However, this might change soon for the reason of recovering overall demand. Global manufacturing is recovering, from which French manufacturers will profit. Also, the manufacturers surveyed anecdotally noted expectations of stronger foreign demand, too.
"Right now the consumer goods sector is the only growing sub-sector in France. The other two segments – intermediate and investment goods – both shrank rapidly, although at slightly slower rates compared to April. Better consumer goods demand also led to higher manufacturing output price inflation, which drove broader manufacturing inflation in May.
"Domestic demand in France is set for a drastic comeback soon. Although the HCOB PMI for total new orders is still clearly below 50, the index jumped up more than three index points. However, foreign demand slowed down even further, with a faster drop compared to the previous month. Where higher demand was reported, this was confined to the consumer goods segment.
"Optimism among French manufacturers surged in May. The corresponding index for future output expectations rose sharply, now matching its historic average. Surveyed manufacturers cited stronger foreign demand in the coming twelve months as their main reason of the more optimistic outlook."
