France: New Recession Feared As Output Falls
Manufacturering output in France has fallen to its lowest level for seven months, renewing fears of another recession in a country described as the "new sick man of Europe".
The latest purchasing managers' index (PMI) figures revealed the rate of decline has accelerated, falling to 45.3 - down from 48.0 the previous month.
It is the fifth month in a row that production has contracted, with lower orders from cautious new customers blamed for the decline.
Meanwhile, services activity decreased at the fastest rate since June and staffing levels continued to decline, meaning employment in the private sector has fallen in 21 of the previous 22 months.
The decline would need to be reflected in gross domestic product (GDP) figures for France to officially return to recession.
The country only climbed out of its previous slump in September, when growth in Q2 was put at 0.5% by the National Institute of Statistics and Economic Studies (Insee).
Chris Williamson, chief economist at Markit, which compiled the data, said: "France looks increasingly like the new 'sick man of Europe', as a second successive monthly contraction may translate into another quarterly decline in GDP, pushing the country back into a technical recession."
Senior economist Andrew Harker added: "The last flash PMI readings for 2013 paint a worrying picture on the health of the French economy.
"The return to contraction in November has been followed up with a sharper reduction in December, with falling new business at the heart of this as clients were reportedly reluctant to commit to new contracts.
"Firms will hope that such reticence ends in the new year as they seek to avoid another protracted downturn."
Output in France was in stark contrast to that of Germany, where expansion returned to a rate not seen for more than two years.
The eurozone as a whole saw output rise for the fifth month in a row and at the steepest rate since April 2011.
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