PARIS (Reuters) – France's services sector contracted further in December, although the pace of contraction eased, according to a closely watched Standard & Poor's Global corporate survey published on Monday.
The Services PMI (HCOB) business activity index rose to 48.2 from 46.9 in November, beating analysts' expectations for a reading of 46.7, although it was still below the 50.0 threshold that indicates growth.
The broader French private sector also saw a slight improvement, with the composite PMI output index rising to 46.7 from 45.9, beating expectations of 45.9, although manufacturing activity fell to a 55-month low of 39.6 from 41.1.
“The services sector remains in limbo. Except for a brief period around the Summer Olympics in Paris, service providers have struggled to generate growth momentum,” said Tariq Kamal Chowdhury, an economist at Hamburg Commercial Bank.
Survey respondents highlighted political instability and weak demand as major challenges, contributing to a sharp decline in employment.
The survey showed that despite the modest improvement in business confidence, the outlook remains weak amid ongoing political uncertainty.
