France's private sector slips back into contraction in October as business confidence falls to its lowest since April 2020

French private sector activity shrank again in October, a month after its first expansion in 10 months, according to the S&P Global flash France purchasing managers' survey published Friday morning.

The composite output index fell to 48.4 from 51.1. Below 50 means contraction. Services activity dropped to 48.4 from 51.2 and the manufacturing PMI to 49.3 from 50.6, its lowest in 11 months. Companies told S&P Global that uncertainty at home and abroad was holding back spending and investment, and that customers were postponing projects, which left new orders falling at the sharpest rate since May.

Sentiment fell further. The survey's gauge of expected output over the next 12 months sank to its lowest level since April 2020 and turned negative for the first time in nearly two years, with firms often pointing to next year's election period and some to the state of the public finances. Payrolls fell for a sixth month.

Prices eased overall, but only because of services. Manufacturers raised their own prices by the most since May as delivery delays grew to their longest since June. Joe Hayes, senior principal economist at S&P Global Market Intelligence, said the quick reversal was hardly surprising given how fast financial conditions had tightened and the political pressure building in France during the month.