Norman Lübke, Economist at Hamburg Commercial Bank, suggests that French manufacturing may now be heading into contraction in the third quarter.
The intermediate goods sector is a significant drag on the industry, easily offsetting marginal growth in consumer goods.
There are not many signs indicating an improvement in manufacturing over the coming months.
“Manufacturers continue to struggle to secure new orders. The overall Purchasing Managers’ Index (PMI) for new orders and overseas new orders remains deep in contraction territory. The shortfall in orders is affecting business expectations as they grow more pessimistic about the future. The challenges in manufacturing are also evident in the labor market. The employment PMI is at its lowest level since the onset of the pandemic in 2020, with layoffs accelerating compared to the previous month.”