• Manufacturing PMI 52.8 vs 52.8 prelim
• Prior 50.0

The final report reaffirms a pick up in both output and new orders, increasing at the fastest pace since 1H 2022. All of this of course is linked to stockpiling as clients are rushing with advanced ordering in anticipation of
price increases and availability issues. So again, this comes with a caveat – much like the Spain report.

The details are also less optimistic as French goods producers continued to widely report supply chain disruptions. Adding to that, capacity constraints are becoming more evident with the steepest rise in backlogs of
work since February 2022.

And in terms of inflation pressures, there was another
considerable uplift in the rate of input price inflation. Of note, selling prices also picked up by the most since February 2023. Trouble, trouble.

HCOB notes that:

“Order books and production lines in France’s
manufacturing sector enjoyed a welcome boost in April
as clients front-loaded their purchases in anticipation of
price increases and supply disruption. A rise in backlogs
of work also raises the odds of this upturn having legs to
continue throughout the quarter.

“That being said, we have seen before how capacity
crunches can quickly morph into a broader inflation
problem. French manufacturers have suffered from a
lack of pricing power over the last two years or so due to
persistently weak demand conditions and international
competition. This may be why firms absorbed a large
portion of the rise in their costs during April, but passing
this on becomes a lot easier when order books are filling
up. These developments need to be watched carefully
from a policymaking perspective.”