Forget Spain and Italy. It’s France that’s Greece-ifying before our very eyes

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France has so far dodged the “problem child” reputations that Spain and Italy have earned. But it looks like that will be increasingly hard to keep up. Data today on France’s business output hinted not just that its economy is decaying—but that it’s doing so rapidly.

Markit’s preliminary March purchasing managers’ index—which measures monthly changes in private-sector output—came in at 42.1 (pdf), down from 43.1 in February. (Anything lower than 50 reflects a drop in output.) That’s the fastest slowdown in business activity France has seen since March 2009. And Jack Kennedy, economist at Markit, says this likely augurs a larger crumbling of the French economy.

“My take is it’s really a continuation of the sharp weakening pattern we’ve seen in recent months—so very much a trend rather than a blip,” Kennedy tells Quartz. “Most of the anecdotal feedback from the survey panel points to a general lack of confidence and clients reining in spending accordingly.”

To frame it in another horrifying perspective, the PMI of the euro zone’s second-largest economy was lower than that of Spain and Italy—and almost down to Greek levels (video), as Reuters’ Jamie McGeever explains.

What’s most worrying is when you look at how France’s data stacked up against the euro zone’s as a whole, which were also published today. While the euro zone’s PMI (blue line) and its GDP growth (orange line) have moved pretty closely in sync, France’s PMI has become unhinged in the last couple of years. And that’s bad because, as PMI reflects business confidence, it’s typically a leading indicator of GDP growth:

Euro zone on the left, France on the right. Markit
Euro zone on the left, France on the right. Markit
Image: Markit

One of the biggest sources of concern: France’s service sector, which contributes something like four-fifths of France’s GDP. Even as the pace of decline for France’s manufacturing output slowed, the services PMI hit 41.9, indicating the steepest drop since February 2009.

“Notably in the latest survey we saw service sector future expectations plunging to [their] lowest since [December 2008,] in the wake of the Lehman collapse which really underlines the scale of the worries at the moment,” says Markit’s Kennedy, adding that that “in turn seems to be feeding back into lower activity.”

But even if PMI continues to fall, the chart above shows that France’s GDP has proven fairly resilient—especially compared with the euro zone’s trend. So things should be okay, right?

Probably not. Kennedy chalks this ”puzzling” gap in GDP and PMI up to the difficulty in accurately measuring service-sector output in the official data. The recent blindsiding slump in French industrial production may show official data finally falling back in line with PMI, he says.

That means that the gap you see in the above chart could be about to close. GDP growth for the first quarter of this year could come in surprisingly low. If so the country’s chances for a near-term recovery are receding faster than its leaders may be willing to admit.