- Prior 51.4
- Manufacturing PMI 50.6 vs 48.1 expected
- Prior 47.8
- Composite PMI 50.1 vs 50.3 expected
- Prior 50.4
It’s a polarising release with the French services sector slumping in December while the manufacturing sector posts a beat on activity. At the balance though, it still leads to a bit of a drag to the French economy with overall activity basically stagnating in the final month of the year. Looking at the details, employment conditions held up while price developments were little changed compared to November. HCOB notes that:
“French private sector business conditions appear largely static in December. The HCOB flash PMI remains marginally in
growth territory, yet it signals a softer expansion compared to the prior month, reflecting an economy still weighed down by
uncertainty among households and firms. Beneath the surface, however, sectoral adjustments have occurred: manufacturing
stabilised, whereas services lost momentum, leaving the aggregate picture flat and the overall French economy sluggish.
“The flash Manufacturing PMI managed a modest climb past the 50.0-point mark as the year drew to a close. December
brought encouraging signs in indices for both output and order books, with foreign demand providing a notable lift. Another
optimistic reading of the Future Output Index and a renewed willingness among firms to expand their workforces provides a
positive signal for the outlook.
“However, so long as no budget is passed by the government, political uncertainty will remain a noticeable headwind for
France’s economy. The passage of the social security budget is at least a small victory for Prime Minister Lecornu. However,
subdued consumer sentiment and intense international competitive pressures from the likes of the US and China diminish
growth prospects
