The updated PMI report highlights an accelerated downturn in France's manufacturing sector as the final quarter of 2024 began. October's final PMI score of 44.5 was in line with its flash estimate and down a tick from September's final print. A significant drop in new orders, largely driven by weak international demand, led to the steepest production fall since January.

Export orders saw one of their sharpest declines on record, attributed to geopolitical issues and a fragile global economy. Manufacturing retrenchment is evident across employment, inventory management, and purchasing activity, with firms anticipating continued contraction over the next year. Intermediate and investment goods were hit hardest, although consumer goods saw a minor rise. Input costs fell for the first time since March, yet companies maintained stable prices for clients, reflecting caution in market dynamics.

Overall, the report underscores manufacturers' pessimism and an ongoing struggle to balance inventory and workforce amid uncertain demand and economic pressures. This latest update trims the French RPI to minus 17 and the RPI-P to minus 20, both measures showing economic activity in general running slightly behind market expectations.

Forecasters look for no change in the final index reading from 44.5 in the flash.

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.