PARIS (Reuters) – The services sector continued to contract in January in France, its longest decline in more than a decade under pressure from sluggish demand, according to the final Purchasing Managers’ Index (PMI) for the services sector, compiled by S&P Global, and released Monday.
The index stood at 45.4 for services, compared to 45.7 in December, well below the level of 50 which separates growth and contraction.
The index was estimated at 45.0 points earlier in January.
Weak demand and customer hesitancy to place new orders weighed on activity, leading to a further decline in work backlogs.
“New business and export orders are still falling and employment is close to the threshold of stagnation,” summarizes Norman Liebke, economist at the Hamburg Commercial Bank.
However, businesses became more optimistic, with the Future Activity sub-index hitting its highest level since August.
“The optimism seems to come from hopes of falling interest rates this year,” underlines Norman Liebke.
The final composite index, which combines data from the services and manufacturing sectors, fell to 44.6 in January from 44.8 the previous month.
(Written by Tassilo Hummel, French version Corentin Chappron, edited by Blandine Hénault)
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