By Sudip Kar-Gupta
PARIS (Reuters) – French manufacturing contracted in December at the fastest pace in more than four years, a monthly survey showed on Thursday, reflecting the headwinds facing the euro zone's second-largest economy.
IS&P Global said its final HCOB purchasing power index (PMI) for the French manufacturing sector fell to 41.9 in December from 43.1 in November. The final reading was in line with the previous PMI number and was the lowest since May 2020.
Any reading below 50 indicates a decrease in activity, while above 50 indicates an increase.
“The French business crisis is growing. The HCOB PMI of manufacturing also sent negative signs in December,” said the Hamburg Commercial Bank's Economist Tariq Kamal Chaudhry.
“2025 is unlikely to be easy. The companies surveyed have little hope for the new year. Expecting future results in the next twelve months are always wrong,” he added.
France's economy has been battered in recent months by political instability as opposition to a planned budget led to the downfall of Michel Barnier's government. Barnier was replaced by Francois Bayrou as Prime Minister.