16th December 2013
Despite better numbers coming from the Eurozone concern is growing that France could be about to slip into another recession writes Philip Scott.
The latest flash estimate from the Markit Eurozone PMI Composite Output Index , which measures economic growth, rose to 52.1 in December, up from 51.7 in November – a result above 50 indicates growth.
Manufacturing led the upturn, with output rising for the sixth successive month and the rate of increase hitting the highest since April 2011. New orders at goods producers likewise rose for a sixth month, also showing the fastest expansion since April 2011. Order book growth was fuelled by rising exports, growth of which continued to run at the fastest clip since early 2011.
But within the figures increasingly divergent trends were also evident by country. While Germany clocked in at 55.2, a rate of expansion not seen since the first half of 2011 in contrast and of greatest concern was a drop in private sector activity for a second month running in France, where the rate of decline accelerated to the fastest since May, after notching up 47.
Both the manufacturing and service sectors signaled sharper reductions in output than in November. Services activity decreased for the second month running, and at the fastest pace since June. Meanwhile, manufacturers posted a marked decline in production, extending the current sequence of contraction to five months.
Commenting on the data, Chris Williamson, chief economist at Markit says: “The upturn means that over the final quarter, businesses saw the strongest growth since the first half of 2011, and have now enjoyed two consecutive quarters of growth.
“However, it’s the unbalanced nature of the upturn among member states that is the most worrying. 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.”