Investing.com - Manufacturing activity in France contracted at the fastest pace in seven months in December, renewing fears over the economic outlook of the euro zone’s second-largest economy, preliminary data showed on Monday.
In a report, market research group Markit said that its preliminary French manufacturing purchasing managers’ index declined to a seasonally adjusted 47.1 in December from a reading of 48.4 in November.
Analysts had expected the index to rise to 49.1 this month.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
Meanwhile, the report showed that service sector activity in France declined to a six-month low of 47.4 this month from 48.0 in November. Analysts had expected the index to ease up to 49.0.
Commenting on the report, Jack Kennedy, Senior Economist at Markit said, “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.”
Following the release of the data, the euro held on to modest gains against the U.S. dollar, with EUR/USD inching up 0.09% to trade at 1.3754.
Meanwhile, European stock markets were lower after the open. The EURO STOXX 50 fell 0.1%, France’s CAC 40 declined 0.2%, London’s FTSE 100 slumped 0.3%, while Germany's DAX dropped 0.1%.
In a report, market research group Markit said that its preliminary French manufacturing purchasing managers’ index declined to a seasonally adjusted 47.1 in December from a reading of 48.4 in November.
Analysts had expected the index to rise to 49.1 this month.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
Meanwhile, the report showed that service sector activity in France declined to a six-month low of 47.4 this month from 48.0 in November. Analysts had expected the index to ease up to 49.0.
Commenting on the report, Jack Kennedy, Senior Economist at Markit said, “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.”
Following the release of the data, the euro held on to modest gains against the U.S. dollar, with EUR/USD inching up 0.09% to trade at 1.3754.
Meanwhile, European stock markets were lower after the open. The EURO STOXX 50 fell 0.1%, France’s CAC 40 declined 0.2%, London’s FTSE 100 slumped 0.3%, while Germany's DAX dropped 0.1%.