Overview
- S&P Global's flash PMIs released on Oct. 23 showed France's composite PMI at 48.4, a return to contraction with both services and manufacturing below 50, while Germany's composite was 52.8 with manufacturing strong at 54.2.
- French firms told the survey they have cut or delayed projects because political uncertainty, higher government borrowing costs and street protests have dented customer demand and hiring plans.
- Price measures in the French PMI signalled an easing of input cost and output charge inflation, suggesting near-term domestic price pressures have softened.
- Markets quickly priced the weaker readings into expectations for European Central Bank policy, making further near-term rate rises less likely as investors weigh slower growth against still-elevated euro-area inflation.
- The divergent national pictures helped push the euro-area composite PMI lower and underline uneven growth risks across the region with implications for trade, jobs and fiscal plans in heavily affected countries.