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The private sector down in November, a first in almost 2 years

2022-12-05T10:26:53.893Z

Private sector activity in France contracted in November, a first in almost two years, according to the composite PMI index of the firm S&P...



Private sector activity in France contracted in November, a first in almost two years, according to the composite PMI index from the firm S&P Global.

After reaching 50.2 in October, the composite PMI index fell to 48.7 the following month, the firm said, confirming the trend observed during a first estimate published at the end of November.

A level below 50 points signals a decline in activity, while a value above this threshold reflects an expansion.

This contraction of the private sector, the first since February 2021, is explained by the decline in the services sector, which had so far resisted, and the even greater decline in the manufacturing sector.

Services, down for the first time since March 2021, suffered from lower demand due to the deterioration in the economy, the high level of inflation and the tightening of financial conditions.

The overall volume of new business fell for the fourth consecutive month, as did that of in-force business, while employment growth slowed sharply.

Combined with weak order books, the decline in activity in the services sector increases the risk of a contraction in French GDP in the fourth quarter.

“Warned Joe Hayes, economist at S&P Global, in the press release.

"

Companies also seem to be anticipating and preparing for an imminent deterioration in the economic situation

", he added: "

the degree of confidence in terms of growth in activity in the next twelve months has in fact fallen two-year low in November

.

While costs and selling prices have slowed compared to October, "

price

pressures" remain "

high

" in November, S&P Global pointed out, in a context where inflation has peaked since the mid-1980s. According to the French Institute of Statistics (Insee), consumer prices rose 6.2% in November year on year, driven by the rise in food products (+12.2%) and energy (18.5%).

"

This inflationary peak which has already lasted for several weeks will last a few more months

", said Monday the Minister of the Economy, Bruno Le Maire, at the microphone of France Inter.

Read alsoECB: first slowdown since March in credit growth to the private sector

On the other hand, when we look at the price of certain

agricultural and industrial raw materials, “

we see the beginning of a decline which should be able to be transmitted to consumer prices around mid-2023

”, he added.

In October, Bruno Le Maire said he wanted to bring inflation down to 5% at the start of 2023, then 4% at the end of 2023 and 2% during 2024.

Source: lefigaro

All business articles on 2022-12-05

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