The October composite PMI fell 1.3 points to 47.3, a 9-month low and well short of the market consensus. Both manufacturing and services contracted with the flash PMI for the former down a tick at 44.5 and its services counterpart 1.3 points weaker at 48.3. Export markets were particularly affected by weak demand, as new orders declined at the most rapid pace since May 2020.

Business confidence plummeted to an 11-month low, and new orders and output declined significantly. Employment was cut for the first time in nearly four years and manufacturers' expectations were bleakest since May 2020.

On the cost side, inflationary pressures diminished, as input price inflation slowed to a 47-month low. Businesses were cautious about passing on costs to consumers, despite a modest increase in output pricing. The economic outlook remains grim, as businesses anticipate ongoing challenges as a result of subdued demand and external pressures. This latest update takes the RPI to minus 17, below consensus, and the RPI-P to 0, within the consensus of the French economy.

The flash composite output index is expected to rise from September's final 48.6 to 48.9, still more than a point short of the growth threshold.

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.