French new factory orders slump at fastest rate since May 2020 as uncertainty and inflation take their toll

French manufacturing sector business conditions
deteriorated at a faster pace at the start of the fourth
quarter, latest PMI
® data from S&P Global showed, as new
orders slumped to an extent rarely seen since data were
first collected in 1998. As a result, production volumes fell
sharply and businesses remained pessimistic towards the
year ahead. October survey data also highlighted a survey-
record accumulation of finished goods stocks as companies
struggled to ship their products.
Meanwhile, French manufacturers remained stuck with
elevated cost pressures. High energy prices were frequently
mentioned by survey respondents. Output price inflation also
remained historically high, despite slowing to a 14-month
The seasonally adjusted S&P Global France Manufacturing
Purchasing Managers’ Index ® (PMI ®
) posted below the 50.0
no-change mark for a second month in a row, indicating
back-to-back deteriorations in the health of France’s goods-
producing sector. At 47.2 in October, the headline measure
fell from 47.7 in September to its lowest level in almost two-
and-a-half years.
French manufacturing output volumes declined in October,
extending the current downturn that began in June. The
rate of contraction was of a similar strength to that seen
in September, which was the sharpest since May 2020.
Companies that cut their output levels commented on weak
demand and persistent supply issues.
October survey data pointed to a rapid deterioration in
new factory orders across France. The decrease was
among the fastest seen since data were first collected in
1998, with panel comments attributing the sales slump to
subdued underlying demand conditions, high inflation and
overstocked clients. Weak economic conditions abroad also
drove a sharp decline in new export orders at the start of the
fourth quarter.

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