Private Sector Activity Declines in France

Private sector activity in France also declined in May. According to an analysis by S&P Global in conjunction with Hamburg Commercial Bank, France’s Flash Purchasing Managers’ Index (PMI) fell from 50.5 points recorded in April to 49.1 points this month. “The contraction in global activity in May,” S&P Global analysts wrote in a statement, “was slightly weaker than the recorded average during the ten months of decline seen from June 2023 through March 2024.”

The slowdown in business activity has an impact on public finances, and the French government has announced a tightening of unemployment assistance legislation, which should save €3.6 billion. The reform will not be submitted to parliament, but will be introduced by decree, which is expected on July 1 and is scheduled to take effect on December 1. Among the proposed measures is a requirement to have worked “at least 8 months in the last 24 months” (the current requirement is 6 months in the last 20 months) to be eligible for benefits. In addition, Prime Minister Gabriel Attal’s government wants to reduce the period of unemployment benefits from 18 to 15 months.

According to the French National Statistical Institute (INSEE), inflation was still up 2.2% in April, continuing the trend from the previous month of +2.3%. On a month-to-month basis, consumer prices rose 0.5%, up 0.3% from the previous month.

And another blow didn’t take long to hit: starting June 17, a ticket to visit the Eiffel Tower in Paris will rise by 20% to €35.30 per person. In detail, an elevator ticket will cost between 29.40 and 35.30 euros for adults, between 14.79 and 17.70 euros for young people from 12 and 24 years of age, and between 7.40 and 8.90 euros for children aged from 4 to 11, disabled people, and their escorts.