French companies sector contracts additional in January, PMI reveals

PARIS (Reuters) – France’s companies sector shrank additional in January as companies confronted weak demand and political uncertainty, in accordance with a closely-watched enterprise survey by S&P World printed on Friday.

The HCOB Flash Providers PMI Enterprise Exercise Index declined to 48.9 from 49.3 in December, beneath analysts’ expectations for a studying of 49.3, and beneath the 50.0 threshold that signifies development.

The broader French personal sector skilled a slight enchancment, with the Composite PMI Output Index climbing to 48.3 from 47.5, beating the forecast of 47.7 whereas the manufacturing exercise index rose to 45.3 from 41.9, surpassing forecasts of 42.3.

“France’s financial system disappoints initially of 2025… It’s primarily the political disaster that’s economically paralysing the nation,” stated Tariq Kamal Chaudhry, Economist at Hamburg Industrial Financial institution.

“The following funds vote will resolve not solely the destiny of the (PM) Bayrou authorities but in addition the financial stability of the nation,” he added.

There was a drop in enterprise confidence in January, with firms judging the outlook for the subsequent 12 months to be broadly impartial, in contrast with slight optimism within the earlier month.

Surveyed companies additionally recorded the quickest tempo of job reducing since October 2020.

France’s INSEE official statistics company reported on Thursday a fall in French enterprise confidence in January.

France is ready to see weak however regular financial development by way of the primary half of 2025 as a political drama over the 2025 funds weighs on customers and companies, INSEE stated final month.