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French business activity weaker than expected in September

by Mike Robinson

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© Reuters. FILEPHOTO: May 9th, 2019, France. Shipping containers stacked in Port of Le Havre. REUTERS/Benoit Tessier

PARIS (Reuters) – The rate of growth in French business slowed further in September and missed market forecasts, a monthly survey showed on Thursday, as concerns over supplies of key goods weighed on the euro zone’s second-biggest economy.

Due to strict COVID-19 port inspections in China, many businesses have faced supply chain challenges.

IHS Markit, a data compiler, said that its preliminary composite Purchasing Managements Index (PMI), which factors in both manufacturing and services sectors, fell to 55.1 in September from 55.9 points in August. This was below the forecast of 55.8.

France’s PMI numbers stayed well above the threshold of 50 points that divides expansions and contractions.

However, France’s most dominant service sector saw its preliminary September PMI drop to 56.0 points in September from 56.3 during August.

In September, 55.2 points were recorded for the manufacturing sector. That’s down from 57.5 points for August. It was below the 57.0 point forecast.

IHS Markit reported that the September preliminary numbers of the composite and manufacturing PMIs were at their lowest levels in five and eight months, respectively.

Joe Hayes, senior economist at IHS Markit said that September’s Flash PMI data shows that France is experiencing a cooling economy.

Hayes said that “the most striking result from the September survey” was the significant drop in manufacturing production growth. This panel member linked it to ongoing supply-side problems.

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