The final November composite and services PMI report reveals a worsening scenario in France. The flash composite index was revised up from 44.8 to to 45.9 but was still well down on October's final 48.1. The final services index dropped to 46.9, some 1.2 points above its flash estimate but still down from 49.2 and its lowest reading since January.

Key drivers of the downturn in both measures included a steep decline in demand, with new business volumes and export orders falling at their fastest rates in a year and four years, respectively. Client hesitancy, budget constraints, and political uncertainty all weighed and reduced business confidence to a four-and-a-half-year low.

However, despite waning workloads, employment rose marginally and rising wage pressures drove input costs higher. Companies attempted to offset these costs by modestly raising service prices, but demand constraints limited their pricing power.

The depletion of backlogs underscores a lack of future work, further signalling spare capacity in the sector. While the Olympic boost earlier this year offered temporary reprieve, the current PMI trajectory points to weak fourth quarter GDP. Today's update puts the French RPI at minus 23 and the RPI-P at minus 10. This means that economic activity in general is still lagging behind market estimates.

Forecasters expect the composite final and services final to be unrevised from the flash indexes at 44.8 and 45.7, respectively.

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.