France PMI Manufacturing was finalized at 53.6 in October, down from September’s 55.0, hitting the lowest level since January. Markit said output level declined as firms struggled to secure necessary materials. Demand conditions showed signs of weakening amid supply constraints. Lead times lengthened at near-record pace and cost inflation were at decade high.
Joe Hayes, Senior Economist at IHS Markit, said:
“The supply chain issues we’ve been documenting for some months have been somewhat restrained to the supply-side of the economy, at least until now.
“Rapid rates of inflation have ensued, but production has still continued to grow and order books fill up. In October, French manufacturers recorded lower output volumes for the first time since January, while new business intakes fell for the first time in 2021.
“Because firms cannot secure the inputs needed to make their products, orders are now also falling as clients are facing lengthy delays on orders or are unable to get components and other items needed to turn semi-finished goods into finished goods.
“It’s difficult to imagine the situation improving any time soon. Prudent inventory management will be crucial for businesses hoping to keep production lines going.”
