French Private Sector Activity Contracts the Most Since 2024

The S&P Global France Composite PMI fell to 44.9 in May 2026 from 47.6 in April, marking a 28-month low and signalling the fastest contraction in private sector activity since early 2024. The decline reflected a sharp deterioration in demand conditions, with total new business falling at the steepest pace in a year-and-a-half amid weakening economic momentum. Labour market conditions also worsened, as private sector employment declined at the fastest rate in 15 months. At the same time, inflationary pressures intensified further, with input costs and output charges rising at their fastest rates in 38 and 36 months respectively, driven by persistent cost pressures across manufacturing and services. Looking ahead, business sentiment fell to a one-year low and was only slightly positive, as firms cited inflation and uncertainty from the Middle East conflict. Expectations for future activity continued to weaken, extending a decline in confidence that began earlier in the year.

The S&P Global France Composite PMI fell sharply to 43.5 in May 2026 from 47.6 in April and well below market forecasts of 47.7, according to flash estimates. The latest data showed France’s private sector contracted for a fifth consecutive month and at its steepest pace since November 2020, driven by a faster downturn in services and renewed weakness in manufacturing. Total new orders fell at the sharpest rate since late 2020, as the demand environment deteriorated considerably amid fuel and energy cost pressures linked to the Middle East conflict. At the same time, employment recorded its sharpest drop since February last year. Inflationary pressures also intensified, with input costs and output charges rising at their fastest pace in at least three years. Finally, firms turned pessimistic on the 12-month outlook for the first time since November 2024, with sentiment dropping to its weakest since the onset of the COVID-19 pandemic, amid rising prices and geopolitical uncertainty.

The S&P Global France Composite PMI was unrevised at 47.6 in April 2026, down from 48.8 in March, indicating a fourth consecutive month of contraction in France’s private sector and the sharpest downturn since February 2025. Services led April’s contraction, with a sharper decline, while manufacturing activity rebounded. Private sector output shrank amid the quickest fall in new orders since April 2025. Meanwhile, employment grew, reflecting service sector hiring. Input price inflation accelerated to a three-year high, with a marked rise in factory-gate prices pushing output inflation to its strongest level in 20 months.