French manufacturing contraction not as deep as forecast in Dec

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The final S&P Global purchasing managers’ index (PMI) for December came in at 49.2 points, just below the 50 mark that indicates growth in activity.

December’s final reading was however higher than December’s flash PMI figure of 48.9. It also marked a recovery from November’s final reading of 48.3.

“France’s manufacturing slowdown continued in December as the effects of inflation, the slowdown in economic activity and high energy costs weighed on the sector’s performance, ” said S&P Global Market Intelligence senior economist Joe Hayes.

“However, the strength of the slowdown continued to weaken, with output and new orders falling at their lowest rates since May and June respectively. Improvements in business confidence also provide tentative signs that the sector’s recession industrial may not be as severe as feared,” he added.

France’s official statistics body INSEE had said on December 15 that it expected the French economy to contract by 0.2% in the fourth quarter of 2022 from the previous quarter.

(Reporting by Sudip Kar-Gupta; Editing by Hugh Lawson)

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