Coronavirus restrictions drag French economy back into a slump

IHS Markit’s monthly index of private-sector activity dropped to 39.9 in November from 47.5 in October, a third straight month below the key 50 level.

The French economy is back in a slump and likely to shrink this quarter amid fresh restrictions to contain the coronavirus.

People queue at the 'click and collect' service of bookshop "Atout Livre" in Paris as all non-essential stores are closed in France to combat the coronavirus disease outbreak, France. (REUTERS)

IHS Markit’s monthly index of private-sector activity dropped to 39.9 in November from 47.5 in October, a third straight month below the key 50 level. The decline was led by services, reflecting the closure of bars and restaurants and the loss of business in the hospitality sector.

The latest curbs aren’t as severe as those implemented during the first wave of the pandemic, when a complete halt to activity sent Markit’s Purchasing Managers’ Index plunging to a record-low reading of 11.1.

Still, economists have revised down their forecasts and expect France’s economy to shrink 3.5% this quarter. With partial lockdowns also in place in other countries, the euro-area economy is projected to contract 1.7%.