French private sector activity remained notably weak last month, according to revised purchasing management data, suggesting the economy may have contracted again in the final quarter.

However, the composite index rose slightly to 44.8 from 44.6 in November, the best performance since August, beating the consensus forecast of 43.7.

Service sector activity contracted for the seventh consecutive month, even though the PMI index increased slightly to 45.7 from 45.4 in November, above the median forecast of 44.3.

Despite the PMI data remaining stubbornly below the break-even level of 50, French businesses reported increased optimism for the new year, with growth expectations edging to a 4-month high, according to S&P Global. Manufacturing firms experienced falling prices, while service providers saw less dramatic price increases than in recent months.

Employment which has become a key metric for European policy makers, who are sensitive to signs of wage increases declined for the second month in over three years. New business for service providers declined for the eighth straight month, albeit at a slower pace than the record decline recorded in November.

The data suggest that France could suffer another downturn in the fourth quarter. PMI data averaged 45.6 in the third quarter during which gross domestic product declined by 0.1 percent above the 44.7 average over the final three months of the year.

Revised eurozone composite PMI data are due later Thursday amid hot debate over the timing of a rate cut from the European Central Bank. ECB officials including President Christine Lagarde have insisted that the governing council has yet to even discuss reducing borrowing rates. But that has not prevented market bets on a rate cut coming as soon as April.

The PMI data take French RPI to 17 and the RPI-P to 20, meaning that the economy is performing rather better than expected.

No revisions are expected leaving the composite output index at 43.7, down from November's final 44.6, and the services PMI at 44.3, down from 45.4.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of around 750 manufacturing and service sector companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided 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.