Thursday, February 7, 2013
French Government Fears 'Social Implosions Or Explosions' | Zero Hedge
And the private sector is gasping for air. The Services Purchasing Managers’ Index fell to 43.6 in January, from 45.2 in December (below 50 = contraction), the fastest rate of contraction since March 2009. Particularly worrisome was the steep decline in employment. Manufacturing was even worse. Its index fell to 42.9 in January. New orders plunged at the fastest rate since March 2009, with domestic demand the primary culprit. Employment skidded as excess capacity led companies to slash their headcount.
That these references to March 2009, the dark days of the financial crisis, keep cropping up in economic data is troubling. The report speaks of a “deepening malaise” and “a broad-based deterioration in the private sector” with “significant headwinds,” “accelerated job cutting,” and “heightened levels of uncertainty.” President François Hollande and his government should be in panic mode.
The private sector is anemic in France. Based on the 2013 budget, the central government will contribute 56.3% to the economy. The remaining 43.7% is spread over local and regional governments and finally the private sector—that is shriveling with the relentless de-industrialization of France.
Read More: French Government Fears 'Social Implosions Or Explosions' | Zero Hedge