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French Economy Declines in December

French Economy Records Steepest Decline in December

The December HCOB Flash France PMI report unveils a troubling scenario as the French economy witnesses a sharper downturn, marking the fastest decline in over three years. The latest HCOB Flash France PMI report for December reveals alarming trends in the French economy, signaling a deepening downturn.

With key sectors experiencing intensified contractions and dwindling business prospects, the economic landscape presents concerning challenges. This comprehensive report sheds light on the critical aspects of this economic decline, offering insights into the sharp fall in output, declining new orders, and eroding business confidence.

Key Highlights:

  • HCOB Flash France Composite PMI Output Index: 43.7 in December (from 44.6 in November), indicating a sharp contraction.
  • Services and manufacturing sectors experienced intensified declines in output due to weak demand conditions.
  • Steep fall in new orders impacted international business, driven by inflation and competitive pressures.
  • Backlogs depleted rapidly, leading to reduced staffing in the manufacturing sector.
  • Business confidence eroded, foreseeing reduced future activity and potential recession in the upcoming year.

French Economy Intensified Contraction Across Sectors

The HCOB Flash France Composite PMI Output Index fell to 43.7 from 44.6 in November, signifying a significant contraction in private sector business activity. Both manufacturing and services sectors experienced a quickened decline in output, attributing it to weakened demand conditions and sluggishness across markets.

French Economy
Source: HCOB

New orders plummeted, impacting international business as well. Subdued demand conditions persisted due to factors like inflation, competitive pressures, and adverse weather, exacerbating sales performances.

Read More: U.S. Job Market Witness Huge Growth in November

Backlogs and Employment Hit

Backlogs of work continued to deplete rapidly, leading to reduced staffing in the manufacturing sector. Overall employment levels in France saw a second consecutive decline, hinting at a challenging job market ahead.

Inflationary pressures eased slightly, but business confidence eroded further. Expectations for future activity hit a low, forecasting reduced business intakes and potential recession in the upcoming year.

French Economy Expert Commentary

Dr. Tariq Kamal Chaudhry, Economist at Hamburg Commercial Bank, expressed concern over the situation, citing intensified contractions in both services and manufacturing sectors. Forecasts predict a slight GDP contraction for France in the fourth quarter, signaling challenging times ahead.

Dr. Chaudhry highlighted the manufacturing sector’s distress, with concerns about future prospects, dwindling orders, and employment woes.

Read More: Unemployment Insurance Weekly Claims Increased Up To 220,000

French Economy Service Providers Under Strain

Service sectors faced their worst phase, with declining new business and shrinking order backlogs, hinting at a challenging future.

The HCOB Flash France PMI report depicts a worrisome economic landscape for France, emphasizing the urgency for measures to mitigate the ongoing downturn.


The HCOB Flash France PMI report paints a grim picture of the French economy with intensified contractions across sectors, dwindling orders, and eroding business confidence. The forecasted GDP contraction for the fourth quarter signals challenging times ahead, urging the need for strategic measures to address the ongoing economic downturn.


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