Little change to the initial estimate as this just reaffirms a drop in manufacturing output at its quickest pace since the early pandemic days in 2020. Inflationary pressures are still persisting and that is dragging down new orders with a drop in demand conditions. S&P Global notes that:
"The July PMI survey suggests the French manufacturing sector is in a downturn. Output and new orders both fell at their strongest rates since the initial wave of COVID-19 infections in the first half of 2020 as high inflation squeezed demand. Excluding pandemic-related disruptions though, the latest decline in production was the strongest for over nine years.
"A major drag on the economy as whole is inflation. The manufacturing sector has seen rampant price pressures for some time, but the economic impact of these has only recently begun to bite hard. New orders fell sharply in July, but firms also reduced their purchasing activity and, in some cases, reduced workforce numbers to cut back on costs.
"Until we see a substantial cooling of price pressures, it's difficult to foresee the economy picking back up. Business confidence remained at a suppressed level during July, reflecting manufacturers' concerns around the outlook for inflation , supply chains and the war in Ukraine."
