Manufacturing PMI drops to 16-month low in June in France
Staff Writer |
June data indicated a renewed slowdown in growth across the manufacturing sector, with overall business conditions improving at the weakest pace since February 2017.
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A further moderation in new business growth was the main factor weighing on the performance of manufacturing companies.
At the same time, the latest survey revealed a sharp and accelerated rise in average cost burdens, largely driven by higher prices for metals.
In response to higher input costs, manufacturers indicated that factory gate price inflation picked up from May’s eight-month low.
At 52.5 in June, down from 54.4 in May, the final IHS Markit France Manufacturing Purchasing Managers’ Index (PMI) signalled only a moderate improvement in overall business conditions.
Moreover, the latest reading was the lowest for 16 months and pointed to a substantial loss of growth momentum since the end of 2017.
Manufacturing output expanded only marginally in June, with the rate of growth the weakest achieved since November 2016.
Survey respondents generally noted that more subdued client demand had acted as a brake on production schedules.
Reflecting this, the latest rise in new work was the least marked for just under two years in June.
Some manufacturers cited slower demand growth in key export markets, with China the main exception.
Despite a soft patch for new order books, manufacturers signalled another solid increase in employment numbers in June.
Efforts to boost operating capacity helped alleviate the rate of backlog accumulation across the manufacturing sector.
The latest rise in work-in-hand (but not yet completed) was the slowest since February 2017.
Intense supply chain pressures continued in June, as highlighted by another sharp deterioration in vendor performance.
A number of firms commented that stock shortages and reduced availability of materials from suppliers had acted as a headwind to inventory building.
Meanwhile, input cost inflation was the highest for four months in June, with survey respondents generally citing greater steel and aluminium prices in particular.
Efforts to protect margins led to another robust rise in factory gate charges. ■