• Previous 46.9
• Composite PMI 47.5 vs 46.7 prelim
• Previous 45.9

The revision marks a slight improvement from November, but the French economy still contracted for the fourth month in a row. Weak demand conditions continue to be the number one culprit, weighing on both production and new orders. HCOB notes that:

“Although the service sector in France continued to contract slightly, according to the HCOB PMI for services, it was a step in the right direction as the index improved from the previous month. However, apart from the period around the Olympic Games, the service sector barely supported overall growth this year. Companies surveyed cited lower customer demand, political uncertainty and difficulties in obtaining credit as contributing factors to the decline in activity in December.

“Despite weak demand for services in France, input prices are rising, although inflation remains well below historical averages. On a positive note, compared to the previous month, cost pressures eased slightly. However, the pricing power of service providers suffers more due to the current weakness in demand. This year, service prices did not grow faster than input prices.

“The year 2025 could bring a little more dynamism. However, French service providers are not so optimistic in the medium term. Order intake is down, and the situation with orders is particularly bad abroad. As for their subdued outlook, reporting companies cite political uncertainty as the main reason, which is understandable given the unclear political and financial situation in Paris. Reflecting this sentiment, there were layoffs in December. Future output is expected to grow over the next twelve months, but not at the pace companies typically expect, with the future activity index below the historical average.”