PARIS, Dec 16 - France's services sector continued to contract in December, although the pace of decline showed signs of easing. The HCOB Services PMI Business Activity Index rose to 48.2 from 46.9 in November, surpassing analysts' expectations of 46.7 but remaining below the growth threshold of 50.0. The broader French private sector also saw a slight improvement, with the Composite PMI Output Index climbing to 46.7 from 45.9, while manufacturing activity fell to a 55-month low of 39.6.
Survey respondents cited political instability and weak demand as significant challenges, leading to a notable reduction in employment. Despite a modest uptick in business confidence, the outlook for the service sector remains subdued amid ongoing political uncertainties.
GERMANY, Dec 16 - German companies expressed a pessimistic outlook for the upcoming year, with only 12.6% anticipating improved business conditions in 2025, according to a poll by the Ifo institute involving approximately 8,000 firms. The construction sector exhibited the highest level of pessimism, with fewer than 5% of companies expecting an upturn next year. In contrast, 15.7% of large manufacturing firms and 18.2% in the chemicals industry expressed optimism.
Germany's economy is projected to shrink for a second consecutive year in 2024, with economic institutes forecasting continued challenges in 2025, exacerbated by weak global demand and high operational costs.
The contraction in German business activity showed slight improvement in December, primarily due to a resurgence in services sector growth. The composite Purchasing Managers' Index rose to 47.8 from 47.2 in November, remaining below the 50 threshold. The services index increased to 51 from 49.3, indicating a return to growth in that sector.