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

This is what the Flash PMI index published on Thursday by S&P Global shows, stating that “the decline in overall activity has been uneven since the end of 2020.”

The study even mentions “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 Flash PMI index published by S&P Global on Thursday, May 21. This composite indicator designed by this company specializing in economic analysis measures activity in the private sector. It stands at 43.5 in May in France, compared to 47.6 in April, where a level below 50 indicates economic contraction. The lowest level in sixty-six months.

Overall activity is particularly weighed down by services: the corresponding index falls to 42.9 in May from 46.5 in April, another sixty-six-month low. In manufacturing, the production index drops to 46.4 in May from 52.8 in April. The manufacturing index falls to 48.9 from 52.8 in April.

“The decline in overall activity has been uneven since the end of 2020, a trend that the surveyed companies attribute to the impact of the conflict in the Middle East,” the study reveals. “The war has indeed generated strong pressures on fuel and energy costs as well as a climate of economic uncertainty, which have weighed on activity,” according to the authors. According to them, “price indices also continued to rise in May, indicating increased inflationary pressures in France.”