France: Manufacturing PMI falls in July
The HCOB France Manufacturing Purchasing Managers’ Index (PMI) fell to 44.0 in July from 45.4 in June. As a result, the index moved further below the 50.0 no-change threshold, and signaled a faster deterioration in manufacturing-sector operating conditions compared to the previous month.
The decline in the PMI was primarily driven by the fastest falls in output and factory orders for six months. Nearly a third of surveyed companies reported weaker demand, with sales to international customers declining. The survey also indicated a sharp reduction in buying activity among French factories, as well as a reduction in staffing numbers.
July saw an acceleration in input cost inflation to a one-and-a-half-year high. Despite the sharper increase in input costs, selling price increases were restrained as companies aimed to maintain competitiveness. Finally, business confidence weakened for a second consecutive month, reflecting concerns over the construction sector’s weakness and predictions of lower client numbers.