France Is Still Struggling

Private sector firms in France reported the third straight monthly drop in output in January.

Flash PMI moved up to 48.5 from 47.3 the previous month, according to Markit.

“Slower falls in activity were recorded in both the service and manufacturing sectors,” according to the report. “In each case, the latest drop was the least marked since October.”

From Markit’s Jack Kennedy:

Weakness in the French private sector persisted in January, with output falling further, albeit at a reduced rate. Moderate falls in new orders, employment and backlogs of work were also recorded, in each case across both the service and manufacturing sectors, pointing to a general softness that seems to show little sign of lifting. Meanwhile, contrasting trends in input and output prices were recorded, with the gap between the survey’s respective indices widening to the largest in nearly three years, as strong competitive pressures eroded firms’ pricing power and prevented the pass-through of higher purchasing costs to clients.

Here’s the chart from the report:

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