PARIS (Reuters) - French business activity contracted this month at the fastest pace since May as the second coronavirus lockdown this year clobbered the dominant services sector, a survey showed on Monday.
Data compiler IHS Markit said that its preliminary purchasing managers index dropped to 39.9 from 47.5 last month, falling much further below the 50-point mark dividing expansions from contractions.
While the lowest figure since France was emerging from its first lockdown in May, the reading nonetheless was far better than April’s all-time low in the depths of the first lockdown.
It also easily surpassed economists’ consensus forecast for 34.0 in a Reuters poll, with estimates ranging widely from 30.0 to 44.9.
The reading corroborates signals from high-frequency data such as Google users’ location histories and electricity use, which have suggested that economic activity is holding up better under the second lockdown.
“These results suggest that some French businesses have been able to adapt their operations to the new conditions and are subsequently less susceptible to sharp downturns in activity when tighter restrictions are imposed,” IHS Markit economist Eliot Kerr said.
The government imposed the second lockdown on Oct. 30 as new COVID-19 cases were spiralling to record highs, and President Emmanuel Macron has said it would remain in place for at least four weeks.
With many non-essential shops, restaurants and hotels forced to close, the service sector is bearing the brunt of the economic fallout.
The PMI for services fell to 38.0 from 46.5 in October, in line with economists’ consensus forecast. Meanwhile, the manufacturing PMI fell to 49.1 from 51.3 in October, short of an expectation for 50.1
Reporting by Leigh Thomas; Editing by Hugh Lawson
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