French president Emmanuel Macron has endured a dismal start to the New Year with his country’s manufacturing sector trapped in a “downward spiral”.
That was the prognosis from a leading economist after new figures showed that industry had contracted again.
And the future of the sector doesn’t appear set to improve any time soon – with economists saying the gloomy outlook will remain for months ahead.
Norman Liebke, economist at Hamburg Commercial Bank, said: “The French manufacturing sector is stuck in a downward spiral.”
At the close of the year the HCOB France Manufacturing purchasing managers’ index (PMI) fell to 42.1. A figure below 50 points marks a contraction in activity, while a figure above 50 shows an expansion. It was its lowest level since May 2020.
It wasn’t good news for Germany or the UK in the manufacturing sector either – but both countries fared better than France.
S&P Global/CIPS UK manufacturing purchasing managers’ index (PMI) survey fell from 47.2 in November to 46.2 in December which marked a 17th consecutive month of the sector shrinking in Britain.
Germany’s manufacturers managed a reading of 43.3 – but the figure has improved for the last five months.
Rob Dobson, director at S&P Global Market Intelligence, said: “With concerns about high interest rates and the cost-of-living crisis hurting demand, the outlook for manufacturers in the months ahead remains decidedly gloomy.”
However one glimmer of optimism came from Martin Beck, the chief economic adviser to the EY Item Club.
