This reaffirms some tentative signs of stability in the French manufacturing sector towards the year-end. The trends in output and new orders showed some improvement but it was a rather subdued quarter overall. As is the case elsewhere in the region, supply constraints and surging price pressures remain key problems to the outlook. Markit notes that:
“The December PMI survey gave us a few reasons to be a bit
more optimistic towards the manufacturing sector looking
ahead. The Suppliers’ Delivery Times Index registered a
meaningful move higher in December. We’re by no means
anywhere near out of the woods yet, and a large portion of
our survey panel are still seeing shortages and increasing
lead times, but there were some reports of improving stock
levels at vendors.
“Firms took advantage though, and we saw purchasing
activity growth accelerate and stocks of purchases
accumulate to the fastest extent on record, which will
certainly help firms increase production levels.
“We also saw continued hiring across the sector, despite
anecdotal evidence suggesting that demand conditions
still remain subdued. Manufacturers expect order books to
begin filling a lot faster as the supply situation improves.
“Overall, the stabilisation in the output and new order
indices following the harsh slowdown in the second half
of 2021, combined with some alleviation of supply-side
constraints, suggests growth rates could get better in 2022.”