Latest data released by Markit - 23 October 2020
- Prior 47.5
- Manufacturing PMI 51.0 vs 51.0 expected
- Prior 51.2
- Composite PMI 47.3 vs 48.0 expected
- Prior 48.5
French business activity weakened further this month, with the softness more evident in the services sector once again as virus fears return to bug the economy.
France had imposed curfews in major cities such as Paris earlier this month, so that is likely part of what is weighing on business sentiment as well. Markit notes that:
"The latest release of PMI data delivers more disappointing news for French businesses. The results suggest that the recent rise in COVID-19 cases and subsequent tightening of restrictions has had a notable negative impact on business conditions. The rate of private sector output contraction accelerated in October, with service providers posting another marked reduction. Meanwhile, although manufacturers managed to record a rise in production, growth momentum faltered and the latest increase was only marginal overall."Private sector firms must now hope that the latest set of restrictions are effective in tempering the spread of the virus. At present, firms' clients are unwilling to commit to large-scale projects while the trajectory of infection rates is steepening."However, with the European winter fast approaching, the prospect of a sharp drop in new positive cases and a full reopening of the economy seems unlikely. The festive period, usually so important for wide range of business, is set to be a difficult one."
The release here isn't exactly hinting at major drop in overall economic activity but should this continue towards the latter stages of Q4, that won't bode well for the outlook in Q1 2021 if the virus situation is still not under control by then.
