While the October PMI improved from its preliminary reading, the manufacturing sector nevertheless remains in contraction. The final result of 48.8 was an improvement over the flash reading of 48.3 and also that of September's 48.2.

The lack of new orders continues to plague French manufacturers, a trend that has been ongoing for over three years. According to survey respondents, domestic orders are more of a negative factor than those for the export market. This is unsurprising given he ongoing political drama in France.

What looks to be shaping up is a negative cycle of events. With new orders increasingly scarce, manufacturers are cutting their purchasing volumes, which could dampen industrial production, which then spreads into the broader economy.

Adding to that are inventories that are accumulating which appear to be more a function of slowing demand than anticipation for increased sales and production. Stockpiling occurred at the fastest rate since May of 2022, with all of this happening in the face of continued supply chain constraints.

It's no surprise then than manufacturers have turned negative in their outlook for the next twelve months, the first time since January they expressed pessimism.

Until there is, or at least progress towards, a resolution to the political situation in France there's unlikely to be any marked improvement in the situation for manufacturers.

The consensus sees no revision from the flash at 48.3 for the final as France continues to lag its peers in the Eurozone.

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.