A recent survey conducted by S&P Global, released on October 4, revealed that France’s services sector witnessed a significant contraction in business activity during September, marking the most severe downturn in nearly three years. The decline in new orders, coupled with sluggish exports and imports, has had a notable impact on the French economy.
The final Services Purchasing Managers’ Index (PMI) for France, sourced from Hamburg Commercial Bank (HCOB), plummeted to 44.4 in September. This marks the lowest level observed since November 2020 and represents a notable decline from the August reading of 46.0. Although France’s overall services PMI came in slightly higher at 43.9, it is essential to note that September marks the fourth consecutive month that the French PMI has remained below the threshold of 50, signifying a contraction in the services sector.
Furthermore, when combining the PMI data for both France’s manufacturing and services sectors for September, the figure also stood at 44.4, down from August’s reading of 46.0. Nevertheless, it is worth highlighting that this final PMI reading exceeded the preliminary estimate of 43.5.
The current reading of 44.4 is a cause for concern, as it has not been seen since November 2020, during the period when France implemented its second lockdown to combat the spread of COVID-19. The decline underscores the challenges and headwinds faced by the French economy in the services sector, warranting continued monitoring and analysis in the coming months.