After nearly reaching expansion in August, the composite PMI slipped to a five-month low of 48.4 in September from 49.8 in August, with the manufacturing component falling to 48.1 from an expansionary reading of 50.4 in August, to a three-month low. Services also showed weakness, dropping to 48.9 in September from 49.8 the prior month.

Once again, demand was weak with overall orders contracting for sixteen consecutive months through September, with domestic political squabbling around austerity measures likely keeping businesses cautious. On the foreign demand side, exports are remaining a drag, contracting to its weakest reading in three months.

French businesses did get some relief from prices, however, as input inflation slowed to a five-month low, with manufacturing and services firms reporting slower increases in operating expenses. This was possibly a factor allowing companies to offer discounts to their customers, the first time since May that prices were lower.

Today's data are not encouraging for the French economy which is facing headwinds on the domestic front with political challenges while internationally, despite and EU tariff agreement with the US, exports continue to be a roadblock. Taken together, households can be expected to tighten their purse strings while businesses will be reluctant to undertake new investment, the combination working in tandem to be a drag on GDP.

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.