The French economy remained in the doldrums in November, according to an early reading of activity, extending the weakness of the opening month of the quarter.

The composite PMI edged down to 44.5 below the consensus forecast of 45.0 remaining stubbornly below the break-even point of 50, according to flash data released on Thursday.

Manufacturing continues to be the Achilles heel of the French economy, with the sector PMI sliding to 42.6 from 42.8 in October, confounding expectations of a rebound to 43.3. That's the lowest level in 42 months. Manufacturing output fell even more sharply, to 41.0 from 42.0 previously.

Services looked a bit brighter, rising to 45.3 from 45.2 in October, but failed to hit the median expectation of 45.7.

Survey respondents reported lacklustre demand in both services and manufacturing, with some citing heightened geopolitical concerns as a factor. Despite that, input costs continued to rise sharply in November, while output charges increased at the fastest pace since May.

With activity across the board continuing to contract, the previously resilient labor market is beginning to falter. Private sector employment fell for the first time in three years, although the job shedding was confined to the manufacturing sector, according to respondents.

Taken with the November business sentiment data released earlier, activity in the fourth quarter looks little better than in the previous three months, when gross domestic product grew by a meagre 0.1 percent.

That adds heft to the narrative that the European Central Bank has finished its interest rate tightening cycle, even as leading ECB officials have stressed that future decisions will depend on incoming data. Minutes of the bank's October governing council meeting due later Thursday may shed light on last month's rate setting deliberations.

The latest data take the French RPI to minus 20 and the RPI-P to minus 23, meaning the economy is underperforming expectations.

Slightly less severe contraction is expected for November's manufacturing PMI, seen at 43.3 versus October's final 42.8 with services also expected to rise a half point to 45.7 versus 45.2. The key composite output index is seen at 45.0, up from 44.6.

The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector business activity by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around ten days ahead of the final report and are typically based upon around 85 percent of the full survey sample. Results covering a range of variables including manufacturing output, employment, new orders, backlogs and prices are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.