The most recent PMI data indicates that the French manufacturing sector is still experiencing significant challenges, as evidenced by the general decline in demand. The resulting reduction in output, lower purchasing levels, and declining inventories is a direct result of the significant decrease in new orders. The final PMI for September was 44.6, a slight increase from August but still well below the 50-expansion threshold and indicative of a substantial decline in activity. The automotive sector and the absence of export opportunities, primarily in North America and Western Europe, contributed to the subdued market.

To conserve cash flow, companies also reduced pre-production inventories at the quickest rate in over four years, as supplier delays persisted. The sector's ongoing pessimism reflects the decline in employment levels, which is primarily attributable to the non-renewal of temporary contracts. However, input cost inflation, which peaked in July, continues to fall.

Manufacturing remains in a state of distress, with little prospect a recovery in the near future. Today's update leaves the RPI at minus 29, indicating clear overall economic underperformance versus expectations, while the RPI-P now stands at minus 10, showing real activity broadly matching market forecasts.

No revision is expected to the flash estimate.

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.