France's private sector contracted for the first time in two-and-a-half years in December with both manufacturing and services activities falling, , amid widespread reports of disruption to business due to the ongoing Yellow Vests or 'gilets jaunes' anti-government protests, survey data from IHS Markit showed on Friday.
The flash Composite Purchasing Managers' Index, or PMI, which combines manufacturing and services, fell to a 30-month low of 49.3 from 54.2 in November. Economists had forecast a moderate decline to 54.
A PMI reading below 50 suggests decline in activity.
The latest downturn was led by the services sector. The flash services PMI tumbled to a 34-month low of 49.6 from 55.1 in November. Economists were looking for a score of 54.8.
The flash manufacturing PMI dropped to a 27-month low of 49.7 from 50.8 in November. Economists had expected a mild easing to 50.7. The manufacturing output index fell to 44.7 from 50 in November, marking the worst fall in 44 months.
"Prior to the December flash results, survey data suggested that the French economy was set to record a fairly reasonable quarterly expansion in Q4," Eliot Kerr, economist at IHS Markit, said.
"Having propped private sector growth up in recent months, contraction in the service sector presents significant downside risks to Q4 growth prospects."
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