Business activity in France’s private sector slowed to a near standstill in December, according to a monthly survey released by S&P Global. The report highlighted ongoing political uncertainty as a key factor continuing to pressure the euro zone’s second-largest economy.
Data from the HCOB France composite flash PMI showed a slight decline to 50.1 in December from 50.4 in November. While the index remained marginally above the 50-point threshold that separates growth from contraction, the reading signals almost no expansion across the private sector.
Services weaken while manufacturing improves
France’s services sector showed signs of cooling, with the flash services PMI falling to 50.2 from 51.4 in November, marking its lowest level in two months. In contrast, manufacturing activity improved notably, as the flash manufacturing PMI climbed to 50.6 from 47.8, reaching its highest level in more than three years.
S&P Global attributed the improvement in manufacturing largely to stronger demand from the aviation industry. In particular, aerospace group Safran recently said it expects its annual revenue from India to triple, supported by rapid growth in the global aviation market.
Political uncertainty weighs on outlook
Despite gains in manufacturing, S&P Global noted that persistent political concerns are limiting broader business momentum. The French government is under pressure to approve a budget before the end of 2025, adding to uncertainty for both companies and consumers.
According to Jonas Feldhusen, junior economist at Hamburg Commercial Bank, private sector conditions in France remain largely unchanged. While the flash PMI continues to indicate slight growth, it also points to a softer pace of expansion compared to the previous month, reflecting ongoing uncertainty across the economy.
