By Sudip Kar-Gupta
PARIS (Reuters) – French business activity contracted at a faster rate in December than the previous month, a survey showed on Friday, adding to signs of a recession ahead for the euro zone’s second-biggest economy as inflation hits businesses.
S&P Global’s flash December purchasing managers index (PMI) for France’s services sector came in at 48.1 points, down from November’s final figure of 49.3 and below the estimate in a Reuters poll which had pointed to a reading of 49.1.
Any figure above 50.0 indicates an expansion in activity, while below that suggests a contraction.
The country’s manufacturing sector fared slightly better, according to the flash forecasts, but remained in contraction.
The flash December PMI figure for the French manufacturing sector rose to 48.9 a final November figure of 48.3, beating a Reuters forecast for 48.2.
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The flash December composite PMI, which comprises both the services and manufacturing sectors, fell to a 22-month low of 48.0 from a final November figure of 48.7 and below a Reuters forecast for 48.9.
“Another month of falling business activity across the euro area’s second-largest economy heightens the risk that the region is headed for a recession,” said S&P Global market Intelligence senior economist Joe Hayes.
“Based off the latest survey results, we’re likely to see French GDP contract in the fourth quarter, which will raise the risk of a technical recession being confirmed in 2023,” added Hayes.
(Reporting by Sudip Kar-Gupta; Editing by Hugh Lawson)