French business activity weaker than expected in September

French business activity weaker than expected in September

© Reuters. FILE PHOTO: Shipping containers sit stacked in the Port of Le Havre, France, May 9, 2019. REUTERS/Benoit Tessier

PARIS (Reuters) – The rate of growth in French business slowed further in September and missed market forecasts, a monthly survey showed on Thursday, as concerns over supplies of key goods weighed on the euro zone’s second-biggest economy.

Problems with global shipping and transport, caused partly by strict COVID-19 checks at Chinese ports, have resulted in supply chain issues for many companies around the world.

Data compiler IHS Markit said its preliminary composite Purchasing Managers Index (PMI) – factoring in both the services and manufacturing sectors – fell to 55.1 points in September from 55.9 in August, and below a forecast for 55.8 points.

Overall, the PMI figures for France remained well above the 50-point threshold dividing expansions in activity from contractions.

Nevertheless, the preliminary September PMI figure for France’s dominant services sector dipped to 56.0 points from 56.3 in August.

The preliminary PMI figure for the manufacturing sector fell to 55.2 points in September from 57.5 in August, and below a forecast for 57.0 points.

IHS Markit said the preliminary September numbers for the composite and manufacturing PMIs marked a five- and eight-month low, respectively.

“Flash PMI data for September provides clear evidence that economic growth in France is cooling,” said IHS Markit senior economist Joe Hayes.

“The most striking finding from the September survey was the strong drop-off in manufacturing production growth, which panel members linked to the well-documented supply-side issues that are ongoing at present,” added Hayes.

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