French Manufacturing Production in October Struggles to Recover

FRANCE – There has been a quicker development of the business conditions for French manufacturers in October. It is all due to the increase in staff and the fastest rise in output last June. Nevertheless, despite the increase in their export orders, the French manufacturers still suffered a marginal fall in overall new business. The depletion in pre-production inventories since August of 2016 was due to the firm purchasing activity for the second month consecutively.

From October, there has been an increase of 50.7 up to 50.1 in September for the IHS Markit France Manufacturing Purchasing Managers’ Index ® (PMI ®). The reading indicated bordering development of the French manufacturing sector’s business condition.

The rise in production at the French manufacturing businesses is a primary factor behind its result. Its latest achievement was the fastest in 4 months. When discussing the expansion, it is noticeable that some panelists are mentioning new business plans.

The development of foreign demand is also noticeable in the latest survey period. Despite the stagnation in September, there has been an increase in export orders. Despite that, the overall business still fell for the second month. They managed to change very little of their rate of decline from September and marginal overall.

The latest survey data also states that the French manufacturer increased its staff, an extension of the run of workforce expansion in 3 months. Furthermore, the percentage of their job production was the quickest since June. When discussing the rise of their staff members, several panelists have linked their ideas of expanding their output.

Even with the increase in staff numbers during the fourth quarter, firms still failed to improve capacity pressures. Surfeits of work has drastically increased for the fifth month in a row, and its rate of expansion accelerated from September.

In the meantime, the French manufacturing firms struggled to improve their input buying. Its pace of reduction leveled up from September and in July, considered as the fastest since August of 2016. It has been the sharpest contraction in pre-production inventories since August.

When talking about the cost front, the input prices continued to decline for the second month consecutively. Furthermore, the rate of reduction fast-tracked to the fastest for three and a half years. Even with the decrease in cost burdens, firms still decided to increase their average output charges.

Lastly, firms remained expectant of the business outlook in October, fueled by the expectations for their new business. Nevertheless, their optimism fell to its weakest point since April of 2016.