In France, the manufacturing sector is still impacted by low confidence in the car supply chain. Overall, manufacturing confidence was quite stable in September at a level of 102 points that is quite the same as was observed during the past six months and on average in 2015-2016, when manufacturing production grew by about +1% per year. However, carmakers, car suppliers, metals and plastics still exhibit low order books and significant inventories. Intermediate goods involved in the car supply chain are particularly impacted. The new information now is that carmakers are again building inventories above the average. The weak trend of car registrations in export destinations such as Germany, Italy and the UK is one explanation, but domestic orders of French carmakers are also quite low, suggesting a downtrend of car sales in the next months, including at home. Overall, continuing demand pressures in the car industry point to a landing of manufacturing production after a good H1, putting overall GDP growth on the downside (+0.2% q/q expected in Q3 2019).
