French Business Expansion in December Slowed Down by Worrisome Omicron

An initial estimate in a monthly survey of purchasing managers showed on Thursday, French business activity expansion seen at a slower pace in this month of December compared with the last month, this trend is partly due to the Omicron COVID-19 variant.

Data compiler IHS Markit said that its flash composite PMI index for December, which includes both the services and manufacturing sectors, stood at 55.6 points.

Readings above 50 points reflects to a positive overall business expectations, the latest print marked a slight drop from the 56.1 recorded in November, although it still beat the consensus forecast in a Reuters poll of analysts of 55.0 points.

IHS economist Joe Hayes said, "A new wave of COVID-19 infections and the emergence of the Omicron variant reportedly weighed on the upturn."

Analysts saw that the flash PMI for the manufacturing sector in December fell 54.9 points, down from 55.9 points in November and falling short of the 55.5.

IHS said that overseas demand fell at the fastest pace since January.

"The drop in new foreign client business was particularly pronounced at service providers as the emergence of the Omicron variant dented tourism", Hayes said, adding that the manufacturing sector was still experiencing shortages of raw materials and components.

"Late deliveries of inputs and delayed production schedules were commonly cited factors by survey respondents," he added.

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