It wasn’t so very long ago that France’s Socialist ministers were making what sounded like such confident predictions about how it was only a matter of time before their economy would be back in the money (relatively speaking, of course — a day and age in which a few tenths of a percentage of GDP growth is something to celebrate… well, yikes), but the third quarter’s results brought them some bad news in the form of an “unexpected” return to economic contraction by 0.1 percent.
Various eurozone countries, however, appear to be making at least marginal improvements in their own economies (especially Germany, the bloc’s largest economy), while France remains stuck in a rut of business-productivity malaise. …I wonder if that whole “Socialism” thing has anything to do with it? Via the Financial Times:
French business activity slumped to a seven-month low in December, exacerbating concerns about the fragility of the eurozone’s second-largest economy.
The disappointing French reading hampered a stronger improvement in the broader eurozone, which registered its best quarter in two-and-a-half years.
France’s “flash” reading of Markit’s Purchasing Managers Composite index for this month fell to 47 from 48 in November, accelerating its decline and producing yet another reading below 50, the level that separates expansion from contraction.
“[The readings] paint a worrying picture of 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,” said Andrew Harker, senior economist at Markit.
And it doesn’t look much like the French economy will manage to spit out any growth to turn those indicators around in the last few weeks of the quarter, either — and it only takes two consecutive quarters of contraction to land themselves squarely back in the territory of official recession. If Hollande’s administration really hoping for a 0.9 percent growth in 2014, they’ve got their work cut out for them.