Fourth decline in five months for France's Services PMI

FXStreet (London) - Business activity in the French service sector fell in January, reversing marginal growth one month previously. The final seasonally adjusted headline Markit France Services Business Activity Index registered 49.4 in January, down from 50.6 in December, the fourth contraction in activity in the past five months.

Markit reported that new business growth eased, but backlogs of work rose at a slightly faster rate while the pace of job shedding moderated. Output prices decreased at the steepest rate since October 2009, while input costs remained broadly stable. Business expectations meanwhile improved, strengthening to a ten-month high.

Jack Kennedy, Senior Economist at Markit, said: “France’s dominant service sector faltered at the start of 2015, with activity falling slightly to reverse December’s marginal growth. This reflected a subdued demand environment and generally weak economic conditions, which weighed on new business intakes. A dissipation of cost pressures in the wake of plunging oil prices allowed service providers greater scope to cut charges, which fell at the sharpest rate in over five years. On a brighter note, service providers’ business expectations improved to the highest since March 2014, although remained subdued relative to the survey’s long-run average.”