The French manufacturing sector’s strong 2017 continued at the end of the third quarter.
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Growth continued to be driven by sharp rises in both domestic and foreign demand.
As a result, firms enhanced their operating capacity by taking on more staff and raising their input buying, which in turn led to a marked rise in output.
Meanwhile, input price inflation intensified amid reports of higher raw material prices.
Concurrently, business confidence remained robust and rose from August’s sevenmonth low.
The PMI is a composite single-figure indicator of manufacturing performance.
It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.
Any figure greater than 50.0 indicates overall improvement of the sector, while any reading below 50.0 indicates overall deterioration.
The IHS Markit France Manufacturing Purchasing Managers’ Index (PMI) posted 56.1 in September to signal a further improvement in the overall health of the French manufacturing sector.
The index was up from August’s reading of 55.8 and the highest since April 2011.
Underpinning the latest expansion was another rise in new orders amid reports of higher client demand and a robust economic environment.
Furthermore, the rate of growth remained well above the long-run series average, despite softening fractionally from August.
The increase was broad-based as new business from foreign clients also continued to grow, albeit to the weakest extent in six months.
Robust client demand encouraged firms to expand their output for the thirteenth consecutive month in September.
Moreover, the rate of growth was the most marked in almost six-and-a-half years.
This contributed to a build-up of post-production inventories, following a three-month period of decline.
As a result of higher production requirements, manufacturers took on additional workers in September.
The rate of job creation accelerated from August and was only marginally weaker than July’s near 17-year high.
In spite of this, backlogs of work continued to accumulate, and at the sharpest pace in 81 months. ■