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Company News

French business activity weakened in October as COVID worries return -PMI

PARIS, Oct 23 (Reuters) - French business activity has contracted in October, a monthly survey showed on Friday, as a resurgence of the COVID-19 pandemic hits the euro zone’s second-biggest economy.

Data compiler IHS Markit said its flash composite Purchasing Managers Index (PMI) fell to a five-month low of 47.3 points in October, down from 48.5 in September and below a Reuters forecast for 48.0 points.

That brought the index below the 50-point threshold dividing growth in activity from contraction.

The manufacturing PMI slipped to 51.0 from 51.2 in September, while the services PMI fell to a five-month low of 46.5 points in October compared with 47.5 in September.

France has imposed curfew measures in major cities including Paris this month to curb the spread of the COVID-19 virus, which in turn has impacted business.

“The latest release of PMI data delivers more disappointing news for French businesses. The results suggest that the recent rise in COVID-19 cases and subsequent tightening of restrictions has had a notable negative impact on business conditions,” said IHS Markit economist Eliot Kerr.

“Firms’ clients are unwilling to commit to large-scale projects while the trajectory of infection rates is steepening. However, with the European winter fast approaching, the prospect of a sharp drop in new positive cases and a full reopening of the economy seems unlikely,” added Kerr. (Reporting by Sudip Kar-Gupta; Editing by Hugh Lawson)

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