FX.co ★ France Services Sector Edges Higher

The HCOB France Services PMI showed a slight increase to 47.4 in May 2025 from 47.3 in April, according to preliminary estimates, falling short of market predictions of 47.5. This marks the ninth consecutive month of contraction, as the service sector continues to exert significant pressure on the overall performance of the private sector. The ongoing decline is primarily attributed to a substantial decrease in new business, with service firms experiencing a notable drop in order intakes. Additionally, employment within the sector continued to decline, largely because companies opted not to replace departing staff. On the pricing front, service providers reduced their selling prices at the most significant rate since January 2021, driven by intense competition, widespread promotional discounts, and lower interest rates. Meanwhile, there was a modest increase in input cost inflation. Looking forward, business sentiment within the services sector deteriorated markedly, with expectations for future activity turning negative for the first time since November.