PMI HCOB Flash indices still very red in France

(Boursier.com) — Not very encouraging. After recording its strongest decline since November 2020 in September, overall activity in France continued to decline at a sustained pace in October. Indeed, if the HCOB Flash PMI index indicates a slowing of the contraction during the month, it nevertheless highlights the second largest decline in overall activity for almost three years. The HCOB composite Flash PMI index of overall activity thus recovered from 44.1 to 45.3 (44.6 consensus).

If the weakness of demand led to a decline in activity in the two sectors studied, the contraction slowed down in the services sector (the decline in activity having nevertheless maintained a sustained pace) while it accelerated in the manufacturing industry, with manufacturers reporting the sharpest decline in their production since May 2020. The Flash HCOB PMI index for service activity thus stood at 46.1 in October (44.4 in September and 45 consensus), to a 3-month high, while the HCOB Flash PMI index for the manufacturing industry fell to 42.6 in October (44.2 in September and 44.4 consensus), on a low of 41 months.

Norman Liebke, economist at the Hamburg Commercial Bank, comments on the latest results of the survey: “the economic situation remains difficult at the start of the fourth quarter for the French economy. If, in the services sector, the decline in activity has slowed compared to September, the pace of contraction has on the other hand increased in the manufacturing sector. Our immediate prediction model, incorporating PMI data as well as other indicators, thus indicates only marginal growth of French GDP in the fourth quarter of 2023”.