Private sector business activity highlights a sharp acceleration in input cost inflation, the steepest in 18 months, yet selling prices were kept in check to maintain competitiveness. The headline index plummeted to 44.0 from June's 45.4, marking the fastest decline since January. This decline is largely attributed to a significant drop in French factory orders, severely impacting the PMI, where new orders hold the most weight. New business intakes fell at the quickest rate in the past six months, with almost one-third of the survey panel noting weaker demand, including a sharper contraction in international sales.

Amidst dwindling demand, French manufacturers reduced production levels for the 26th consecutive month, experiencing the fastest decline since January. Capital goods dragged the most on output. Forward-looking indicators, like purchase quantities, remained negative, forecasting a further reduction in buying activity. Consequently, with a subdued outlook and shrinking new orders, French factory employment continues to decline. This paints a grim picture for the French manufacturing sector, grappling with rising costs, falling orders, and sustained reductions in production and employment. Today's report trims the French RPI to minus 4 and the RPI-P to 0, meaning that economic activity in general is now running slightly behind market forecasts.

No revisions are expected to the flash report leaving the sector PMI at just 44.1, down from June's final 45.4.

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.