This reaffirms some tentative signs of stability in the French manufacturing sector towards the year-end. The trends in output and new orders showed some improvement but it was a rather subdued quarter overall. As is the case elsewhere in the region, supply constraints and surging price pressures remain key problems to the outlook. Markit notes that:
"The December PMI survey gave us a few reasons to be a bit more optimistic towards the manufacturing sector looking ahead. The Suppliers' Delivery Times Index registered a meaningful move higher in December. We're by no means anywhere near out of the woods yet, and a large portion of our survey panel are still seeing shortages and increasing lead times, but there were some reports of improving stock levels at vendors.
"Firms took advantage though, and we saw purchasing activity growth accelerate and stocks of purchases accumulate to the fastest extent on record, which will certainly help firms increase production levels.
"We also saw continued hiring across the sector, despite anecdotal evidence suggesting that demand conditions still remain subdued. Manufacturers expect order books to begin filling a lot faster as the supply situation improves.
"Overall, the stabilisation in the output and new order indices following the harsh slowdown in the second half of 2021, combined with some alleviation of supply-side constraints, suggests growth rates could get better in 2022."
