French manufacturing production suffered its biggest decline in December since May 2020, due to a further drop in the overall volume of orders, according to the PMI index published Thursday by the S&P Global agency and the Hamburg Commercial Bank (HCOB) .
(AFP/FREDERICK FLORIN)
The buyers' index for manufacturing stood at 41.9 in December, up from 43.1 in November. An index below 50 signals contraction.
“Production posted its sharpest decline since May 2020 due to a further marked drop in the overall volume of new orders”, particularly in the automobile and construction sectors, details the press release. “Weak demand had an impact on inventory levels, which fell in December.”
Employment has “decreased again, with workforce numbers falling at a significantly greater rate than in November, while manufacturers have reduced their selling prices in order to stimulate sales,” he adds.
The decline in production “primarily reflects an unfavorable demand environment,” indicate S&P Global and HCOB.
And the decline in the overall volume of new orders also reflects “the sluggishness of demand on international markets”, since export sales fell in December, thus following “the trend recorded for almost three years”.
French manufacturing companies “expressed themselves as pessimistic” about an increase in their activity in the next twelve months: “the fear of a prolonged decline in demand, the current climate of political uncertainty and the weakness of investment spending among customers have, according to respondents, weighed on the level of trust”, underlines the press release.
