The mood in France’s services sector improved more than expected in October although it remained negative overall, a business survey showed on Tuesday.
The HCOB France flash purchasing managers index (PMI) for the services sector, compiled by S&P Global, came in at 46.1 points, up from a final 44.4 in September and beating the analysts’ consensus view of 44.6 in a Reuters poll.
While the pace of contraction softened from September, it was still the second-strongest in almost three years, S&P Global said in a press release. Any reading above 50 points signals economic growth while values below that point to contraction.
“The services sector is hitting roadblocks”, said HCOB economist Norman Liebke, citing a further drop in new orders and a continued slowdown in the job market.
Manufacturing remained in a downturn, with the related flash October PMI slipping to 42.6 points from 44.2, a 41-month low. A composite index, combining services and manufacturing, came in at 45.3 points.
Lower manufacturing demand also led to a faster reduction in backlogs of work, Liebke said, which will further limit activity gains in the coming months.
The survey also pointed to potential new inflation worries.
