- Prior 46.9
- Composite PMI 47.5 vs 46.7 prelim
- Prior 45.9
The revision marks a slight improvement to November but the French economy is still seen contracting for a fourth month running. Weak demand conditions remain the number one culprit, weighing on both output and new orders. HCOB notes that:
“Although the service sector in France continued to contract slightly, according to the HCOB PMIs for services, it was a step
in the right direction as the index improved compared to the previous month. That said, aside from the period around the
Olympic Games, the service sector has barely supported overall growth this year. Surveyed companies cited lower customer
demand, political uncertainty, and difficulties in obtaining credit as contributing factors to December’s drop in activity.
“Despite weak demand for services in France, input prices are increasing, although inflation remains well below the historical
average. Positively, compared to the previous month, cost pressures eased slightly. However, service providers’ pricing
power is suffering more due to the current demand weakness. This year, service prices have not risen faster than input
prices.
“The year 2025 might bring a bit more dynamism. However, French service providers aren’t that optimistic in the medium
term. Order intakes are falling, and the order situation is particularly suffering abroad. Regarding their subdued outlook,
reporting companies cite political uncertainty as a major reason, which is understandable given the unclear political and
financial situation in Paris. Reflecting this sentiment, there were layoffs in December. Future output is expected to grow over
the next twelve months, but not at the pace firms typically expect, with the future activity index below its historical average.”
