- Prior 48.5
- Manufacturing PMI 48.3 vs 48.2 expected
- Prior 48.2
- Composite PMI 46.8 vs 48.4 expected
- Prior 48.1
The headline and composite readings are fresh eight-month lows, underscoring the negative sentiment that's carrying over into Q4 for the French economy. Demand conditions remain subdued and is still the biggest problem but at least employment conditions managed to hold up. Adding to that, price pressures were also on the softer side at the balance and that should provide some comfort for the ECB amid Germany's situation. HCOB notes that:
“The subdued trend in France’s private sector persists. The Flash Composite PMI for October fell to 46.8, indicating a continued and stronger contraction in overall economic activity. Output in both manufacturing and services is declining, pointing to broad-based weakness. Our in-house HCOB nowcasting model predicts zero growth for the third quarter.
“While French firms maintain a fundamentally positive outlook, sentiment deteriorated. This is largely attributable to the weak global economic environment and domestic political uncertainty. The forward-looking index for business expectations has worsened further from an already low level, and the order situation remains lacklustre. Although Prime Minister Sébastien Lecornu gained short-term political leeway for budget negotiations by suspending the pension reform, the overall economic and political climate remains tense. This is likely to weigh on consumer spending and investment activity.
“Conditions in the manufacturing sector remain fragile. Declines in production and new orders suggest a prolonged period of weakness. In an effort to boost sales, manufacturers adjusted prices downwards, as output prices fell for the second consecutive month. However, it is worth noting that the sub-index for employment remains above the growth threshold in both sectors – a sign of underlying labour market resilience.”
