PARIS: French business activity unexpectedly contracted in October, marking a quick reversal from September’s growth, a survey by S&P Global showed on Friday.
This reflected the sharpest decline in demand for French goods and services since May, which surveyed businesses tied to heightened political uncertainty and economic pressures. French government borrowing costs have jumped in recent weeks on investor concerns about the country’s ability to repair its finances, while waves of street protests have raised the political temperature ahead of a presidential election in the spring.
“September’s rebound in economic activity proved to be short-lived, which is hardly surprising given the rapid tightening of financial conditions and a further increase in political pressure across France during October,” said Joe Hayes, senior principal economist at S&P Global Market Intelligence.
The S&P Global French flash services PMI for October fell to 48.4 points from 51.2 in September. A figure below 50 shows a contraction in activity, while above 50 shows expansion. The services PMI figure was also below a Reuters poll forecast of 50.7 points.
The flash manufacturing PMI for October fell to 49.3 points from 50.6 in September, also below a Reuters forecast for a reading of 50.5.