- Ahead of 46.9
- Composite PMI 47.5 vs 46.7 prior
- Ahead of 45.9
The review indicates some improvement in November but the French economy is still seen contracting for the fourth month in a row. Weak demand conditions remain the main culprit, weighing on both output and new orders. HCOB notes:
“Although the service sector in France continued to contract slightly, according to the HCOB PMI for services, it was a step in the right direction as the index improved compared to the previous month. That said, aside from the time around the Olympic Games, the service sector has barely supported overall growth this year. Companies surveyed cited lower consumer demand, political uncertainty, and difficulties in obtaining credit as factors that contributed to the decline in activity in December.
“Despite weak demand for services in France, input prices are increasing, although inflation is still well below the historical average. Positively, compared to the previous month, cost pressures decreased slightly. However, the pricing power of service providers is suffering more due to the current weakness in demand. This year, service prices have not risen faster than input prices.
“The year 2025 could bring a little more impetus. However, French service providers are less optimistic in the medium term. Intake of orders is falling, and the order situation is particularly suffering abroad. Regarding their stable outlook, reporting companies cite political uncertainty as the main reason, which is understandable given the unclear political and financial situation in Paris. Reflecting this opinion, there were layoffs in December. Future output is expected to grow over the next twelve months, but not at the pace companies typically expect, with the future activity index below the historical average.”
