The final November Manufacturing PMI paints a concerning picture of the French manufacturing sector, marked by its sharpest contraction since the COVID-19 pandemic's first wave. At 43.1 or 0.1 point below the flash estimate, the revised PMI underscores sustained contraction, with November marking the twenty-second consecutive month below the 50.0 threshold.

Factory orders fell, driven by weak domestic and international demand, including from key markets like the US and Germany. Consequently, production volumes shrank, and firms slashed purchasing activity and inventories to preserve cash flow. Competitive pressures also forced manufacturers to lower their output prices, even as input costs rose slightly. Employment cuts continued, largely through non-replacement of temporary staff, while backlogs of work diminished at a record pace. Anecdotal evidence pointed to weakened demand in sectors such as construction and autos.

The sector's outlook remains bleak, with firms expecting further declines in output over the next year. More generally, the latest data lower the French RPI to minus 30 and the RPI-P to minus 22. This means that economic activity in general continues to run quite well behind market forecasts.

No revision from the very contractionary 43.2 flash is the call for PMI manufacturing final.

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.