France December final services PMI 50.1 vs 50.2 prelim

• Prior 51.4
• Composite PMI 50.0 vs 50.1 prelim
• Prior 50.4

The French services sector and overall business activity slumped to stagnation towards the end of last year, as demand conditions were more or less static in December. While there were some reports of increased client interest, firms noted that uncertainty led prospects and customers to hold back on spending.

On the price front, things continue to ease further amid more benign input price inflation with operating expenses rising at its softest pace that was well below
the long-run trend seen since the survey began in 1998. So, there’s that.

HCOB notes that:

“France’s private sector ended the year in stagnation. The past year has been marked by uncertainties such as external
headwinds emanating from U.S. policy and Germany’s economic slowdown, but most principally the domestic challenges
relating to France’s fragile political environment.

“Business activity in the services sector stalled at year-end. As anticipated, the surprisingly strong November figures now
appear to have been a temporary anomaly. Alongside weaker activity, new orders disappointed, particularly export orders,
with panellists citing subdued demand from the US market.

“Sentiment among service providers deteriorated in December, with the corresponding index falling to its lowest level in five
months. Employment and capacity utilisation also reflect the sector’s muted outlook, as hiring has been virtually flat since
November, while outstanding business continued to decline.

“The sluggish economy is evident in pricing dynamics. Services firms have little pricing power and, in some cases, are
resorting to discounts to support sales. This is squeezing margins, as input costs remain elevated, driven primarily by
persistent wage pressures.”

This article was written by Justin Low at investinglive.com.