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France Private Sector Contracts Most In 6 Months

The French private sector contracted at the fastest pace in six months in November amid fresh Covid-19 lockdown, flash survey data from IHS Markit showed Monday.

The composite output index fell to 39.9 in November from 47.5 in October. A score below 50 indicates contraction. Nonetheless, the reading was above economists' forecast of 34.0.

It is somewhat positive to see that the latest contraction in activity was substantially slower than during the previous lockdown, Eliot Kerr, an economist at IHS Markit said.

These results suggest that some French businesses have been able to adapt their operations to the new conditions and are subsequently less susceptible to sharp downturns in activity when tighter restrictions are imposed, Kerr noted.

The overall private sector decline was predominantly driven by services, where firms recorded a sharper contraction for the second straight month. Manufacturers reported a decline in production for the first time since May, but the rate of reduction was moderate overall.

The flash services Purchasing Managers Index dropped to 38.0 from 46.5 a month ago. The reading was forecast to fall to 37.7.

The manufacturing PMI came in at 49.1 in November versus 51.3 in the previous month. The score was expected to drop moderately to 50.1.

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