A newly released estimate of France’s Purchasing Manager’s Index (PMI) finds the nation falling to a 7-month low. If the figures are reflected in the next quarterly GDP, France will have entered another recession.
The PMI report published by Markit shows France at 47.0 in December, down from 48.0 in November. Any number below 50 signifies a contraction. Markit spokesman Chris Williamson said in reference to the report, “France looks
increasingly like the new ‘sick man of Europe.'”
With two consecutive months of economic contraction it seems likely that France’s quarterly GDP report will also show contraction. If it does, that will make two consecutive quarters, the technical definition of a recession.
Along with much of the world, France suffered a recession as part of the economic downturn in 2008. That lasted a year. In 2012 France narrowly avoided another recession. But it fell again in the first quarter of 2013, marking a 2nd recession. Now the PMI numbers may signal the onset of a 3rd recession.
France’s socialist President Francois Hollande ran and won on a platform of reversing social welfare cuts made by his predecessor, but near zero growth and high unemployment have made him spectacularly unpopular.