Activity in France's ailing manufacturing sector remained at its lowest ebb in more than three years in December, a survey showed on Tuesday, as tighter financing conditions and weak orders weighed on output.

The final reading of the HCOB Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, fell to 42.1 points last month - its lowest reading since May 2020 - from 42.9 in November, little changed from an initial 42.0 "flash" estimate.

Any figure below 50 points denotes a contraction in activity, while above 50 reflects an expansion.

"The French manufacturing sector is stuck in a downward spiral", said Norman Liebke, an economist at Hamburg Commercial Bank, pointing to continued weakness in orders due to deteriorating financing conditions amid high prices.

He added that HCOB now forecasts an overall contraction for the French manufacturing sector in the fourth quarter of 2023, adding: "It would mean that the sector is in a technical recession as output fell in the third quarter as well."

The manufacturing sector executives polled in the euro zone's second-biggest economy continue to see a bleak outlook for 2024, the survey showed.

"Manufacturers continued to cut their workforce capacity at a fast rate, increasing the likelihood of a further increase in the official unemployment rate," Liebke said. (Reporting by Tassilo Hummel; Editing by Hugh Lawson)