French PMI Shows Sharp Business Slowdown in October as Demand Weakens
French business activity contracted more sharply than expected in October, according to a new survey released on Friday, as demand for goods and services in the eurozone’s second-largest economy continued to soften amid ongoing political and economic uncertainty.
Services Sector Hits Six-Month Low
The HCOB France Flash Purchasing Managers’ Index (PMI) for the services sector, compiled by S&P Global, dropped to 47.1 in October — marking a six-month low. This reading remains well below the 50-point threshold that separates growth from contraction and represents the 14th consecutive month of decline.
Economists polled by Reuters had expected a higher reading of 48.7, while September’s final figure stood at 48.5.
Manufacturing Activity Inches Higher
The flash manufacturing PMI rose slightly to 48.3 in October, up from 48.2 in September and a touch above expectations of 48.2. However, despite the small improvement, the manufacturing sector also remains in contraction territory.
The composite PMI, which combines both services and manufacturing activity, fell to 46.8 from 48.1 in September — its sharpest decline in eight months. Analysts had forecast a figure closer to 48.4, underscoring the extent of the slowdown.
Private Sector Weakness Persists
“The subdued trend in France’s private sector persists,” said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank. “Output in both manufacturing and services is declining, pointing to broad-based weakness across the economy.”
Despite the broader downturn, French companies continued hiring for the third consecutive month, though at a slower pace. Business leaders also remained cautiously optimistic about future output, even as confidence has been eroded by political uncertainty and sluggish global demand.
Feldhusen added that the forward-looking business expectations index had “worsened further from an already low level,” highlighting persistent concerns over growth momentum.
Economic Outlook Remains Fragile
Earlier this month, the Bank of France said the economy is still projected to grow 0.3% in the third quarter — matching the previous quarter’s pace — despite ongoing political tensions and international trade headwinds.
