France’s economic indicators have signaled alarming trends as the country’s PMI Manufacturing slumped to 43.6 in September, marking a 40-month low. PMI Services and Composite figures too painted a grim picture, both plummeting to a 34-month low, with values of 43.9 and 43.5, respectively.
Norman Liebke of Hamburg Commercial Bank expressed concerns regarding the sharp dip in business activity across the service and manufacturing sectors. Liebke’s outlook for 2024 suggests an economic growth rate lower than earlier projections. This bleak forecast is mirrored by the manufacturing sector’s sentiment, which has turned notably pessimistic. Manufacturers harbor “growth expectations [that] fell to their lowest since May 2020.”
For the current quarter, Liebke’s predictions are hardly optimistic. He said, “Economic growth for this quarter… points to growth of just 0.2%.” Interestingly, he notes that any slight growth will predominantly be propelled by the public service sector, with the private service sector anticipated to contract, reflecting the PMI data.
Furthermore, the decline in unemployment witnessed recently is expected to be short-lived, with rates likely to surge in the upcoming months. On the inflation front, rising input costs and output charges remain a concern. Liebke anticipates a surge in inflation, predicting it “to have risen further in September to a rate of 5.5%” before it begins to taper off.
