- Final Manufacturing PMI 45.3 vs. 44.9 expected and 46.2 prior.
Key findings:
- French factory output restricted by rapid fall in new orders.
- Backlogs used to support production; workforces shrink further.
- Input price inflation at 14-month high amid rising material costs.
Comment:
Commenting on the PMI data, Norman Liebke, Economist at Hamburg Commercial Bank, said: "French manufacturing output stayed subdued in April. The manufacturing sector continues to thwart the overall economy’s recovery, but this should only be temporarily. The Output Index dropped, reflecting a faster demand deterioration. Nevertheless, we expect a recovery in the manufacturing sector in the third quarter of this year.
"Consumer goods remain at the forefront of the manufacturing recovery. While the other two segments - intermediate and investment goods – are still declining at a fast pace. This divergence has generally been ongoing since the middle of 2023 in output and overall new orders. "Input prices are getting hotter. Input prices increased after several months of continuous decline, mainly due to the consumer goods sector. Anecdotal evidence suggests that higher input costs were due to greater prices for oil-based products, steel and foodstuff. "Notably, French manufacturers are optimistic about the future.
The corresponding index for output expectations is above 50 for the third month in a row. Manufacturers are building their optimism due to expectations of stronger demand domestically and abroad, while also hoping for a betterment of economic conditions. In addition, a slower pace of French manufacturers’ job cutting also fits into the picture of a more optimistic outlook."
