French manufacturing sector strengthened slightly in October

Activity in France’s manufacturing sector strengthened slightly in October, although the country’s new lockdown will likely hit the sector soon, according to a monthly survey published on Monday.

Data compiler IHS Markit said its final purchasing managers’ index rose to 51.3 in October from 51.2 in September. That was slightly better than a preliminary October reading of 51.0 and kept the index above the 50-point line dividing expansions in activity from contractions.

Nevertheless, IHS Markit said future activity would be impacted by the latest French lockdown, set up to curb a resurgence of the COVID-19 pandemic in the country.

On Wednesday, President Emmanuel Macron announced a new nationwide lockdown, initially slated to run until Dec. 1 although it could be extended.

“The latest PMI data pointed to another solid month for French manufacturers, as the sector continued to recover from the coronavirus-induced downturn earlier this year. Although output growth softened, it remained broadly in line with the series trend, and new orders increased at a quicker rate,” said IHS Markit economist Eliot Kerr.

“However, the manufacturing sector now faces the significant possibility that COVID-19 restrictions will remain in place for a prolonged period. According to flash PMI data, the recent imposition of curfews has already had a substantial negative impact on the service sector, and that is likely to spill over into the manufacturing sector going forward,” added Kerr.