Paris, April 07 (QNA) - France's private sector activity contracted in March at its fastest pace since October, weighed down by weak demand and rising cost pressures linked to the war in the Middle East, a survey showed on Tuesday.

The S&P Global composite Purchasing Managers' Index (PMI), which measures activity across manufacturing and services, fell to 48.8 in March from 49.9 in February, remaining below the 50 threshold that separates growth from contraction for a third consecutive month.

The decline reflects weaker client spending and increased business caution, as geopolitical tensions and higher energy costs prompted companies to delay orders and investment decisions.

Input costs rose at the fastest pace since November 2023, driven by strong inflationary pressures, particularly in the manufacturing sector, while new business fell at a sharper rate, weighing on overall sales.

Joe Hayes, principal economist at S&P Global Market Intelligence, said uncertainty remains elevated, noting that while French firms have grown accustomed to political volatility in recent years, the current environment continues to weigh on growth.

He warned that inflation linked to the conflict raises the risk of stagflation -- a combination of weak economic growth and persistently high prices. (QNA)