France sees slowest contraction in service sector for a year

The French services sector has performed better than expected in August. While still contracting, the pace of contraction has slowed. Analysts were expecting the squeeze to bite harder.

Markit's purchasing managers' index shows a rise from 48.6 to 48.9, rather than the anticipated drop to 47.7.

Jack Kennedy, senior economist at Markit said:

The downturn in French services activity eased further in August, moving the sector closer to stabilisation. This largely offset a return to contraction in manufacturing output, leaving private sector activity down only modestly in the latest survey period. An improvement in service providers’ future expectations to the highest for over a year provides further positive news, although the overall picture remains far from rosy.