The French service sector experienced its first contraction since October last year, according to a survey by S&P Global. According to Jin10, the final Purchasing Managers' Index (PMI) for services in January fell to 48.4, down from 50.1 in December, though slightly better than the preliminary reading of 47.9. This marks the first time the index has dropped below the 50 threshold since October. The composite PMI also decreased to 49.1 in January.
Despite these figures, S&P Global noted that France's approval of the 2026 budget this week could provide some support to businesses. Jonas Feldhusen, an economist at Hamburg Commercial Bank, commented, "At the start of the year, the French service sector faced setbacks with a noticeable lack of orders and cautious customer attitudes. However, business expectations have significantly improved, which is noteworthy. This optimism seems to stem from the belief that resolving the long-standing budget impasse will help reduce uncertainty, thereby supporting consumption and investment momentum."