Julien Manceaux, ING's senior economist for France, noted that the last Bank of France activity indicators painted a mixed picture of the French economy.

• "Declining from 97.3 to 96.5 in December, the main indicator ended the year below its 2019 average. Despite the end-of-year weakness, the indicator shows better activity figures for the fourth quarter last year than the third.
• In manufacturing, the indicator remained strong, showing higher levels of activity than in November. The manufacturing production figures for November, which were published at the same time, showed a 0.1% contraction after two months of positive growth. Consumer goods production was the main factor behind this, dropping by 9.2% month-on-month while investment goods production was still growing by 3.1%. Industrial production grew by a mere 0.3% thanks to better energy and construction growth figures. We think December should bring better figures, allowing for a rebound in manufacturing production in the fourth quarter after the 1% contraction (QoQ) registered in the third. However, this may already be yesterday's story: the Bank of France survey showed weaker capacity utilisation and lower order books at year-end which could bring some weakness in industrial activity figures at the start of this year.
• In December, the service sector was behind the drop in the Bank of France indicator, with one of the lowest activity readings of 2019 and signs of cash flow issues in more companies than at any point in 2019. We also noted a drop in consumer sentiment in December, with the main indicator falling from 105 to 102, the lowest level since July. The main factor behind the drop was consumers' assessment of the economic situation, which also affected their confidence in their future financial situation. Fears of unemployment remained contained and the survey did not show a large impact on their purchasing intentions."