French architecture in France

France PMI December 2021

France: Composite PMI eases in December, but remains comfortably in expansionary terrain

The IHS Markit Flash Purchasing Managers’ Index (PMI) edged down to 55.6 in December from 56.1 in November. As a result, the index moved closer to the 50-threshold, but still signaled a solid improvement in business conditions from the previous month.

December’s deterioration was largely attributed to a downturn in manufacturing activity, while the services sector posted another robust expansion. Although domestic demand remained solid in the month, new foreign orders waned, logging the worst reading since January. More positively, employment continued to grow at a marked, albeit somewhat softer, pace. On the price front, higher costs for raw materials and wages continued to fuel input cost inflation, which in turn translated into higher selling prices as firms tried to protect their margins.

Joe Hayes, senior economist at IHS Markit, stressed:

“It’s clear that the risks to the economy have grown substantially since November, and a fresh wave of Covid-19 infections could derail services activity. While France has so far distanced itself from implementing virus-combatting measures of the same stringency as other parts of Europe, changes in business and consumer behaviour in the face of the Omicron variant could dent the recovery.”

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