Following a fleeting surge during the Paris Olympics, the French economy experienced a substantial decline in September. The composite PMI output index experienced a significant decline to 47.4, its lowest level in eight months, indicating a significant decline in private sector activity. The manufacturing PMI edged up only marginally to 44.0 and the services PMI dropped to 48.3, a 6-month low. .

The demand surge that was induced by the Olympics dissipated rapidly, as new orders contracted at the quickest rate since June. This decline had a particularly significant impact on the manufacturing sector. The number of customers decreased, and there was a decrease in interest from the North American and European markets. Additionally, the rate of decrease in backlogs of work was the fastest since November 2022, which serves as an additional illustration of the decrease in demand.

Nevertheless, there was a degree of optimism in the services sector, as firms were more optimistic about a recovery in the latter half of 2024. The country is currently dealing with post-Olympics market readjustments, and even though cost pressures have eased and input prices have declined, the overall economic outlook remains fragile, bringing the RPI to minus 7 and the RPI-P to 0, within the market consensus of the French economy.

The headline index is seen at 52.7, down from August's final 53.1 but still indicative of modest growth.

The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector business activity by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around ten days ahead of the final report and are typically based upon around 85 percent of the full survey sample. Results covering a range of variables including manufacturing output, employment, new orders, backlogs and prices 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 report also contains flash estimates of the manufacturing and services PMIs. The data are produced 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 purchasing managers' manufacturing indexes, 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.