French business activity stooped down to a four-month low during September, with services performing weaker than expected with France struggling to contain a resurgence of new COVID-19 cases, according to a survey published on Wednesday.
The survey was conducted by Data compiler IHS Markit, saying that its preliminary Purchasing Managers’ Index (PMI) fell to 48.5 during September from its 51.6 in August, thus falling massively short of its expected 51.9 for the month.
As a result of this index going below the 50-point threshold demarcating growth in activity, with it being at its lowest since May, after France had emerged from a two-month COVID-19 lockdown that forced the country into a recession.
Recently however, France has seen a rise in new infection, with recent weeks reporting record levels of cases, leading to the imposition of numerous new measures to try and curb the spread of the coronavirus, and to also reduce the number of intensive care admissions, with the latter being over-populated recently.
IHS Markit economist Eliot Kerr said that “The rise in case numbers has been accompanied by fresh restrictions, but has also caused hesitancy among businesses due to fears of a second round of temporary business closures”.
He added that “For now, at least, firms remain optimistic towards the year ahead outlook, but should the current trajectory of infection rates persist, that confidence is likely be tested in the coming months.”
The survey also indicated that confidence in the service sector was decreasing, with the flash PMI falling to 47.5 from 51.5 in August, reaching the lowest level since May, as well as falling short of expectations for a stable reading at 51.5.
On the other hand, the manufacturing sector, which has a much smaller portion of the whole French economy, showed signs of slight improvement, with the index rising to 50.9 from 49.8, with this being slightly better than the expected reading of 50.5.