France's Economic Pulse Quickens in December

In a sign of potential economic recovery, France's PMI Composite Output Index rose to 47.5 in December, up from 46.7 in November, as reported by S&P Global and Hamburg Commercial Bank (HCOB). This index, which reflects both the services and manufacturing sectors, suggests a slight improvement in business activity.

Service Sector Struggles Continue

However, the seasonally adjusted HCOB France Services PMI Business Activity Index remained in contraction territory for the fourth consecutive month, registering at 49.3, up from November's ten-month low of 46.9. This indicates ongoing challenges within the service sector, despite the overall improvement in the composite index.

Inflation and Pricing Power Challenges

"The service sector in France is facing weak demand, yet input prices are on the rise, although inflation remains below historical averages. There's a slight easing in cost pressures compared to the previous month, but service providers are finding it difficult to pass these costs onto consumers due to the current demand weakness," explained Dr. Tariq Kamal Chaudhry, Economist at Hamburg Commercial Bank.