Financial News: France Private Sector Falls Deep Into Contraction

France Private Sector Falls Deep Into Contraction

11/22/2024 - 06:58:00 (RTTNews)

(RTTNews) - France's private sector contracted the most since January as prolonged weakness in demand damped expectations, flash survey results from S&P Global showed on Friday. The flash HCOB composite output index fell markedly to 44.8 in November from 48.1 in October.

This was the third monthly fall in private sector output and the score signaled the steepest contraction since January.

The survey revealed deepening downturns at both manufacturers and service providers in November. The services Purchasing Managers' Index dropped more-than-expected to 45.7 from 49.2 in the previous month. The score was seen at 49.0.

The factory PMI posted 43.2, which was down from 44.5 in October. The indicator was expected to edge up to 44.6.

At composite level, new work slipped deeper into decline. A sharper fall in new orders led firms to channel more sources towards completing backlogs of work. The pace of depletion was the fastest in four years.

Nonetheless, data showed a renewed uptick in private sector employment, with the rate of job creation the strongest for six months.

French companies anticipate the contraction trend in activity to carry on into 2025 as, for the first time since May 2020, expectations for output over the next 12 months were pessimistic, the survey showed.

Regarding prices, the survey showed intensification of price pressures. Operating expenses grew at the fastest pace in three months due to higher salary costs. In response, output charges increased although service providers exclusively drove this trend.

"The French economy is being rocked by uncertainties," Hamburg Commercial Bank Economist Tariq Kamal Chaudhry said.

"The HCOB Flash Composite PMI for November starkly reveals that businesses are heavily impacted by crises both domestically and internationally," said Chaudhry.

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