Private activity in France continued to slow down in France in November to the point of contracting for the first time since February 2021, according to data published this Wednesday by the firm S&P Global.
The PMI Flash index thus stood at 48.8, 1.4 points less than in October according to this first estimate. An index above 50 indicates growth in activity, while an index below 50 indicates contraction.
In detail, the services activity index fell to 49.4 in November (51.7 in October), the lowest in 20 months. Manufacturing output recovered to 46.0 in November (43.5 in October), a 3-month high. The manufacturing industry index also recovered to 49.1 in November (47.2 in October), a three-month high.
The service offer is running out
On the employment side, the darkening of the economic outlook led companies to limit hiring in November. In fact, although job growth held for the 23rd consecutive month, the job creation rate registered its lowest level since May 2021.
“Although the French manufacturing sector has been in a contraction zone since the start of the second half of 2022, the continued expansion of the service sector had so far supported overall activity growth. This essential support for French economic growth appears be coming”. however, until the end,” said Joe Hayes, a senior economist at S&P Global Market Intelligence.
“French companies have struggled to maintain business growth in a context of high inflation, combined with intense cost pressures, marked uncertainty and rising interest rates, this accumulation of headwinds has created a very unfavorable environment for demand. However, on a more positive note, the latest price data has revealed an easing of inflationary pressures.
In the rest of Europe, Germany is not doing any better than France with an index of 46.4 which, however, is up 1.3 points in a month.
Source: BFM TV
