For the first time in a year and a half, French output is contracting, mirroring the trend seen in Germany, as Europe's biggest economies succumb to record inflation and growing uncertainty over the war in Ukraine, Bloomberg reported.

S&P Global's index of French private sector activity fell in August to its lowest level since pandemic disruptions in early 2021. It fell more than economists expected, falling below the threshold that separates growth from contraction.

New orders fell in both services and manufacturing, with companies the least confident since November 2020.

High inflation and waning demand growth after the pandemic have forced businesses and consumers to cut discretionary spending, said Joe Hayes, an economist at S&P Global. European economies look set to struggle later in the year.

A recession in the 19-member eurozone is now more likely as energy prices have risen sharply, according to analysts surveyed by Bloomberg. The continent, which has already seen its fastest price rise since the introduction of the single currency, is also poised to raise interest rates further after the European Central Bank raised borrowing costs last month for the first time since 2011.

Germany, which depends the most on Russia for natural gas supplies and will face the prospect of a shortage this winter, saw production start to decline in July and contract again in August, S&P Global said in a separate release. Europe's No. 1 economy has seen a deepening decline in private-sector business activity, said Phil Smith, deputy director of economics at S&P Global Market Intelligence, describing the outlook as riddled with uncertainty.

Continued weakness in manufacturing is exacerbated by a slowdown in services, with surveyed businesses reporting growing demand pressures from high inflation and rising interest rates, Smith said.