- July final manufacturing PMI 49.8 vs 50.0 prelim
- Prior 51.2
It’s a sluggish start to the second half of the year for French manufacturing amid an accelerated declines in new orders, production
and purchasing activity. The good news at least is that cost pressures did ease markedly but S&P Global did attach a caveat to that in saying: “Most of the survey data in July was
collected prior to the steep rise in oil and energy prices seen
during the tail-end of the month.” So, there’s that.
In any case, this marks a third straight month that new order inflows fell while production volumes also decreased. On the latter, the pace of decline
also gathered pace but was only modest overall at least.
Looking to price pressures, July survey data signalled the slowest rate of
input price inflation in four months. However, output charges rose
again and to a pace that was only narrowly weaker than in
June.
S&P Global notes that:
“France’s manufacturing sector is struggling once
again as inflationary pressures and weak confidence
undermine order books.
“Oil and gas price increases in recent weeks will signal
to businesses that the broader macroeconomic
and geopolitical environments are both volatile and
uncertain. This will likely erode confidence further,
raising the risk of further demand destruction, especially
if inflation kicks higher.
“That said, we’ll have to wait and see if there is any
temporary reprieve through renewed safety stockpiling
and advanced purchasing if customers deem price and
supply risks to warrant it.”
This article was written by Justin Low at investinglive.com.