© Reuters. FILE PHOTO:An employee works on the automobile assembly line of Bluecar electric city cars at Renault car maker factory in Dieppe, western France, September 1, 2015. REUTERS/Philippe Wojazer/File Photo
PARIS (Reuters) – Activity in France’s manufacturing sector weakened in October by more than initially estimated, according to a monthly survey, as inflationary pressures weighed on the euro zone’s second-biggest economy.
S&P Global (NYSE:)’s final manufacturing purchasing managers index (PMI) fell to 47.2 points in October from 47.7 in September. A flash forecast for the October manufacturing PMI had given a figure of 47.4 points.
Readings above 50 points show growth while those below 50 show a contraction.
The final October manufacturing PMI reading was the lowest since May 2020, after the global economy had been hit by lockdowns imposed to deal with the first wave of COVID-19.
Manufacturers also suffered in October due to a sharp drop in new orders, added S&P Global.
“The volume of new inputs purchased slumped sharply in October as companies adjusted to the negative economic outlook. Although this has helped reduce the strain on suppliers, which should also extend to addressing the demand-supply imbalance which has caused inflation to soar, we’re still seeing historically elevated price pressures,” said S&P Global Market Intelligence senior economist Joe Hayes.
“Falling prices across Europe in recent weeks will be a relief to French manufacturers, as anecdotal evidence suggests that energy remains a principal driver of cost pressures at present,” added Hayes.