French economic activity declines in March, weak demand - PMI

23 Mar, 2024

French economic activity declines in March, weak demand - PMI

French business activity contracted for the tenth consecutive month in March, as indicated by a monthly survey, reflecting a decline in demand for French goods and services alongside a decrease in employment. According to the HCOB flash purchasing managers index for France's services sector, compiled by S&P Global, the index dropped to 47.8, down from February's 48.4 and below the 48.7 forecast in a Reuters poll. Any figure below 50 signifies a contraction, contrasting with figures above 50 indicating expansion.

Similarly, the flash manufacturing PMI declined to 45.8 points, falling short of a Reuters poll forecast of 47.5 points and below February's final manufacturing PMI of 47.1. The flash composite PMI, encompassing both services and manufacturing, decreased to 47.7 points from February's 48.1, also missing a Reuters poll forecast of 48.6.

Norman Liebke, an economist at Hamburg Commercial Bank, commented that the French economy is postponing its recovery until at least the second quarter. INSEE, the official stats agency, predicted zero growth for the first quarter, followed by a modest 0.3% expansion in the second quarter. Paris revised its 2024 growth forecast downward to 1% from the previous 1.4% after recording a 0.9% expansion last year.