French service sector activity subdued in Dec -final PMI

PARIS (Reuters) – Activity in France’s dominant services sector remained subdued last month as inflation continues to weigh on demand and the eurozone’s second-largest economy faces growing fears of heading into recession. was shown Wednesday.

“Overall, the latest survey data round out the sector’s worst quarterly performance since early 2021, reinforcing calls for an imminent recession,” said Joe Hayes, senior economist at S&P Global, who compiled the survey. I would…” he said.

The Final Purchasing Managers Index (PMI) for France’s services sector reached 49.5 points in December, up slightly from 49.3 points in November. His final December figure topped the flash estimate of 48.1.

Values ​​above 50 indicate an increase in activity, and values ​​below 50 indicate a decrease.

High interest rates and inflation continue to weigh on demand, but there were signs that firms are softening their pricing strategies as commodity price inflation eases, according to S&P Global.

“Rising interest rates have dampened activity in sectors sensitive to changes in borrowing costs, such as real estate, and sustained inflation continues to weigh on real incomes, reducing purchasing power,” Hayes said. .

Purchasing managers also reported a seventh consecutive month of declining new business from international customers, the survey found.

Last month, French Finance Minister Bruno Le Maire said the government was still projecting positive growth in 2023 despite business concerns.

S&P Global’s December Composite PMI, which includes both services and manufacturing, was 49.1 points, up slightly from 48.7 points the previous month.

Reported by Tassilo Hummel.Editing by Susan Fenton

Our standards: Thomson Reuters Trust Principles.

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