French services sector contracts further in October, PMI shows
2024.11.06 04:19
PARIS (Reuters) – France’s services sector began the fourth quarter on a weak footing, with activity contracting at the fastest pace since March as demand conditions deteriorated, a survey of business executives showed on Wednesday.
The HCOB France Services PMI, compiled by S&P Global, fell to 49.2 in October from 49.6 in September, below the 50.0 threshold that indicates economic growth but better than an earlier 48.3-point flash estimate.
The continued decline was driven by the sharpest fall in new business since January, with both domestic and international orders waning.
“While GDP growth surprised on the upside in Q3 … it’s now clear that economic momentum is waning,” said Dr Tariq Kamal Chaudhry, economist at Hamburg Commercial Bank.
“The GDP uptick was largely driven by one-off effects from the Olympic Games in Paris, and as demand fades, French service providers — and the wider economy — will struggle to find a new growth catalyst.”
Growth in the euro zone’s second-biggest economy beat estimates by accelerating by 0.4% in the third quarter 2024, up from 0.2% in the second quarter, the national statistics agency INSEE said in preliminary figures last week.
The composite PMI, which includes both manufacturing and services, fell to 48.1 from 48.6.
Employment levels stalled, with businesses hesitant to expand staffing amid a substantial drop in business confidence. Expectations for future activity were muted, with companies citing intensified competition and a shrinking customer base as key challenges.
