"Strong pressures", "climate of economic uncertainty"… French activity records its sharpest decline in five and a half years against a backdrop of war in the Middle East

L’étude évoque même “a risk of recession”. Due to the impact of the conflict in the Middle East, activity in France experienced its sharpest decline in five and a half years in May, according to the PMI Flash index published by S&P Global on Thursday May 21. This composite indicator designed by this company specializing in economic analysis measures private sector activity. It stood at 43.5 in May in France, compared to 47.6 in April, while a level below 50 reflects an economic contraction. The lowest level in sixty-six months.

Overall activity is particularly pulled down by services: the corresponding index falls to 42.9 in May compared to 46.5 in April, again a sixty-six month low. In the manufacturing industry, the production index fell to 46.4 in May compared to 52.8 in April. The manufacturing industry index fell to 48.9 from 52.8 in April.

“The decline in overall activity has shown an unequaled pace since the end of 2020, a trend that the companies surveyed attribute to the impact of the conflict in the Middle East”relève l’étude. “The war has indeed generated strong pressure on fuel and energy costs as well as a climate of economic uncertainty, which weighed on activity”according to the authors. According to them, “the price indices also continued to recover in May, which indicates increased inflationary pressures in France.”