The final data confirmed another month of declining business activity in French manufacturing, albeit by less than previously reported. The 44.5 flash sector PMI was revised up to 45.1 and so now stands 0.9 points short of June's final 46.0. However, despite the positive revision this was still the weakest reading since May 2020.

Output and new orders extended their downtrend at significant rates and prompted another reduction in input purchases. Stocks of purchases were down for a third straight month and headcount was also trimmed for a second consecutive month. Business confidence about the year was pessimistic, with weak demand, competitive pressures, inflation and higher interest rates all cited as negative factors.

Meantime, a further and accelerated reduction in operating expenses facilitated a second successive decrease in output prices. The rate of discounting was only moderate but it was still the fastest since April 2020.

Today's update points to a further loss of manufacturing momentum at the start of the current quarter and provides early warning of a probable marked slowdown in GDP growth. That said, the July data also put the French ECDI at 10 and the ECDI-P at 30, both measures pointing to overall economic outperformance.

No revision is expected to the flash print.

The Manufacturing Purchasing Managers' Index (PMI) provides an estimate of manufacturing business activity for the preceding month by using information obtained from a representative sector survey incorporating around 400 companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The data are released by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the ISM manufacturing index in the U.S. and the S&P Global PMIs elsewhere, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures..

The S&P Global PMI manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices.