Home world Macron crisis: French business grinds to a halt – Brexit wreaks havoc on EU…


Macron crisis: French business grinds to a halt – Brexit wreaks havoc on EU…

by ace

According to figures released by IHS data provider Markit, France's Purchasing Manager Index was at its lowest level in four months. The PMI fell from 52.9 in August to 51.3 in September, leaving the country on the brink of contraction in trading activity. The shocking performances of France's manufacturing sector fueled declining levels of commercial activity.

Staying only in expanding territory, the sector fell below the PMI average, registering a score of 50.3 in September, down 1.2 points from last month's reading.

Service companies performed slightly better, but still showed signs of slowing, falling below average again.

Economists punctuated the sector at 51.6 in September after recording nearly two points higher at 53.4 last month.

PMI research studies how many companies report better than normal business conditions in a given month.

IHS Markit economist Eliot Kerr said: “With service companies experiencing their smallest increase in activity since May, fears of negative effects from the manufacturing sector are materializing.

"Any intensification of such effects would likely reduce economic growth going forward."

Chris Williamson, chief economist at IHS Markit, revealed that business managers expressed fears that Brexit and global trade tensions were responsible for the fall.

He added: “If the manufacturing sector, which is currently in its worst recession since 2012, continues to weaken, there will also be concern about the spread of this malaise throughout the rest of the economy.

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ECB President Mario Draghi told the European Parliament last night that there is a lack of "convincing signs of a rebound in growth".

He said: "Recent data and forward-looking indicators – such as new export orders in the industry – show no convincing signs of a recovery in growth in the near future and the balance of risks to growth prospects remains tilted to the downside."

"The longer the weakness in manufacturing persists, the greater the risk that other sectors of the economy will be affected by the slowdown," he added.

Germany has been warned that its economic model is leaving the country exposed to the ups and downs of international trade.

Influential business leaders are demanding a change in lending rules to boost the economy during tough trading times.

Isabelle Job, chief economist at Credit Agricole, said: “Trade war, Brexit, uncertainty, nothing has changed in the past year.

“Central banks have developed cycle aversion. The European economy is slowing because of the trade war, uncertainty.

“But what can the central bank do? It cannot play with these two factors … shouldn't the mandate of central banks be rebalanced to ensure more financial stability?

“The accommodation of monetary policies is a blessing for the markets. This leads to more risks. "


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