French private sector contracts for 4th-m – PMI

French private sector activity contracted for the fourth consecutive month in December, as reflected in the HCOB Flash France Composite PMI Output Index, which rose slightly to 46.7 from November’s 45.9 but remained in contraction territory.

Manufacturing continued to struggle, with the Manufacturing PMI Output Index falling to a 55-month low of 39.6, while services showed a milder decline, with the Services PMI Business Activity Index reaching 48.2, a two-month high.

Weak demand drove declines in both sectors, with political uncertainty and sluggish performance in industries like construction and automotive cited as key factors.

New business fell for the seventh month, exacerbated by a sharp drop in export orders. Employment saw its steepest decline in over four years, as firms across both sectors reduced workforce numbers due to subdued demand and persistent spare capacity.

Business confidence edged into optimistic territory, though sentiment remained weak, weighed down by domestic political instability.

Cost pressures moderated, but firms reported little scope to raise selling prices due to intense competition. The survey underscores the challenges facing France as it grapples with economic and political headwinds heading into 2025.

Attribution: HCOB Flash France PMI

Subediting: M. S. Salama