France October flash services PMI 48.4 vs 50.7 expected
Prior 51.2
France October flash manufacturing PMI 49.3 vs 50.5 expected
Prior 50.6
France October flash composite PMI 48.4 vs 50.5 expected
Prior 51.1
That’s not a good sign as the French private sector falls back into contraction in October, amid political and financial concerns. Weighing
on activity levels was the sharpest decline in demand for
French goods and services since May, which surveyed
businesses attributed to heightened uncertainty and
economic pressures.
The only good news perhaps for the ECB is that the survey’s price gauges decreased from
September to signal an easing of input cost and output
charge inflation rates.
Looking at the breakdown, manufacturers and
service providers reported steeper declines in demand amid
reports of projects being postponed as customers held back
on decision making. Meanwhile, French businesses turned
pessimistic towards one-year outlook with the future composite index falling to its lowest
level since April 2020. That indicates negative corporate
sentiment for the first time in close to two years. The more downbeat
expectations were often linked to next year’s election period,
with some companies also expressing concerns regarding
public finances.
On prices, data at the composite level signalled an easing of
inflation across France in October. The service sector was
the main driver, with slower rates of input cost and output
charge inflation offsetting sharper price pressures for
manufacturers.
Overall, the report today does at least put economic expectations and inflation pressures in sync. Both are coming in a little softer and may tone down ECB rate hike expectations. But again, this is only France – who is already facing up against big troubles from a fiscal and economic standpoint. We still have to see how the PMI numbers play out with Germany and the rest of the euro area for better confirmation.
This article was written by Justin Low at investinglive.com.
