France PMI Manufacturing dropped from 55.9 to 54.9 in December, below expectation of 55.3. PMI Services dropped from 57.4 to 57.1, above expectation of 55.6. PMI Composite dropped from 56.1 to 55.6.
Joe Hayes, Senior Economist at IHS Markit said:
“France’s economy ended the fourth quarter with another solid monthly expansion in output, but the headline number doesn’t really tell us the full story as trends by sector are still widely divergent.
“Growth in France is, at present, entirely reliant on the service sector as manufacturing output fell for the second time in the past three months. Weak demand for goods, supply shortages and the consequent impact these have on production is weighing heavily on manufacturers. Meanwhile, although services firms are continuing to see rising activity levels, growth slowed from November as some firms saw new business intakes dented by the latest wave of COVID-19 infections hitting France right now. Tourism has also been a welcomed pillar of additional support to the services sector since the middle of this year, but December data showed new business from overseas falling amid the emergence of the Omicron variant.
“It’s clear that the risks to the economy have grown substantially since November, and a fresh wave of COVID-19 infections could de-rail services activity. While France has so far distanced itself from implementing virus-combatting measures of the same stringency as other parts of Europe, changes in business and consumer behaviour in the face of the Omicron variant could dent the recovery.”
