France’s economic downturn accelerates as new orders crumble, PMI shows
2024.11.22 03:29
PARIS (Reuters) – French business activity contracted in November at its sharpest pace since early this year, a survey of business executives showed on Friday, as new orders and future expectations hit a four-year low.
The HCOB Flash France Services PMI fell sharply to 45.7 in November from 49.2 in October, marking a 10-month low. Analysts polled by Reuters expected a more modest fall to 49.0.
The broader composite PMI index, which includes both services and manufacturing, dropped to 44.8 from 48.1, its lowest since January. Any reading below 50 signals a contraction in activity.
A decline in new orders, particularly from international markets, contributed to the overall weakness, with businesses reporting the steepest fall in new order volumes in four years.
For the first time since May 2020, French businesses recorded negative expectations for activity over the coming year.
Political uncertainty may be partly to blame, with France’s far-right National Rally party threatening to topple Prime Minister Michel Barnier’s fragile coalition government over a dispute about the 2025 budget.
“The French economy is being rocked by uncertainties,” said Tariq Chaudhry, an economist at Hamburg Commercial Bank.
“This is not a good signal for private consumption and investment decisions”, he added.
Despite the gloomy outlook, there was a slight increase in private-sector job creation.
