| Consensus | Actual | Previous | |
|---|---|---|---|
| Index | 42.6 | 42.9 | 42.8 |
Highlights
The French manufacturing sector remained subdued in November, suggesting that third quarter weakness stretched into the final months of the year.
The manufacturing PMI inched up to 42.9 last month, slightly higher than the 42-month low of 42.8 recorded in October. While that's marginally stronger than the flash estimate of 42.6 (also the consensus forecast), manufacturing activity remains well below the break-even level of 50.
Production volumes fell at the fastest pace since May of 2020, according to S&P Global, citing anecdotal evidence of weak demand. Backlogs declined for the tenth consecutive month.
Crucially, the previously resilient employment market seems to be softening, with manufacturers cutting workforce numbers, mostly by opting not to renew temporary contracts.
The data suggest that France could suffer another manufacturing downturn in the fourth quarter. PMI data ranged from 44.2 to 46.0 in the third quarter, meaning the sector could turn in an even softer performance than the 0.3 fall percent recorded previously
The data come at the end of a week during which investors have become ever more convinced that rate cuts could come by the middle of next year, after inflation fell to 2.4 percent in November, according to flash data released on Thursday.
The data take the French RPI to minus 23 and the RPI-P to minus 12, meaning the economy is underperforming market expectations.
The manufacturing PMI inched up to 42.9 last month, slightly higher than the 42-month low of 42.8 recorded in October. While that's marginally stronger than the flash estimate of 42.6 (also the consensus forecast), manufacturing activity remains well below the break-even level of 50.
Production volumes fell at the fastest pace since May of 2020, according to S&P Global, citing anecdotal evidence of weak demand. Backlogs declined for the tenth consecutive month.
Crucially, the previously resilient employment market seems to be softening, with manufacturers cutting workforce numbers, mostly by opting not to renew temporary contracts.
The data suggest that France could suffer another manufacturing downturn in the fourth quarter. PMI data ranged from 44.2 to 46.0 in the third quarter, meaning the sector could turn in an even softer performance than the 0.3 fall percent recorded previously
The data come at the end of a week during which investors have become ever more convinced that rate cuts could come by the middle of next year, after inflation fell to 2.4 percent in November, according to flash data released on Thursday.
The data take the French RPI to minus 23 and the RPI-P to minus 12, meaning the economy is underperforming market expectations.
Market Consensus Before Announcement
No revision is expected to the flash data leaving the headline index at 42.6, down from October's final 42.8.
Definition
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.
Description
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.
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.
