France October flash services PMI 51.3 vs 51.5 expected

• Prior 52.9
• Manufacturing PMI 47.4 vs 47.1 expected
• Prior 47.7
• Composite PMI 50.0 vs 50.3 expected
• Prior 51.2

The French economy is seen stagnating to start Q4 as economic activity grinds to a halt with both services and manufacturing sectors seen weakening further compared to September. Inflation pressures remain elevated and high prices continue to hinder demand conditions for the most part. Adding to that, business confidence is also seen slumping to its lowest level in nearly two years. S&P Global notes that:

“A 50.0 reading in the French Composite Output Index to start the final quarter of 2022 indicates a complete stagnation of the eurozone’s second-largest economy. As high inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term erodes client purchasing power, borrowing costs rise and uncertainty grows, the outlook for France’s economy looks daunting.

“The manufacturing sector has been in a downturn since the second quarter, according to our PMI data, and remained firmly in contraction territory during October. Strikingly, factory orders fell to an extent which has only been surpassed during periods of extreme economic turbulence such as the global financial recession of 2008/2009 and later eurozone sovereign crisis. Testament to the strength of the demand slowdown was a surveyrecord surge in stocks of finished goods as companies struggle to find buyers in the current market.

“The service sector meanwhile continued to grow, although the expansion weakened since September and was only marginal. Although we do continue to see a relative degree of resilience in this sector, the demands on services to solely drive overall economic growth across France are rapidly becoming too large.”