French economy shrinks again in January, prices fall

France's private sector experienced a fifth straight month of declining business activity in January 2025, with the HCOB Composite PMI revised down to 47.6 from an initial estimate of 48.3.

French economy shrinks again in January, prices fall

This figure is slightly above December's reading of 47.5. While both manufacturing and services sectors contracted, the decline in manufacturing slowed (PMI at 45, up from 41.9 in December) while services saw a steeper downturn (PMI at 48.2, down from 49.3). Job losses intensified, reaching the highest point since September 2020. Companies continued to reduce their backlogs of work despite the shrinking workforce, though the pace of backlog reduction slowed to a six-month low.

French prices fall for first time in four years

Interestingly, prices for French goods and services fell for the first time in almost four years, even as input cost inflation ticked slightly upwards.