French services sector contracts in September as Olympic boost fades, PMI shows
3:52 am Thursday, October 03rd, 2024
PARIS (Reuters) – France’s services sector contracted in September, albeit less than initially expected, reversing strong growth seen in August driven by the Paris Olympic Games, according to a survey published on Thursday by S&P Global.
The HCOB France Services PMI fell sharply to 49.6 in September from 55.0 in August, indicating a marginal contraction in activity. Any reading below 50.0 signals a decline in activity, while readings above that level indicate growth.
September’s flash services PMI stood at 48.3 points.
“The Olympic euphoria has faded: Following the conclusion of the Olympic Games, the service sector has lost its growth momentum,” said Dr Tariq Kamal Chaudhry, Economist at Hamburg Commercial Bank.
“Declining customer numbers, reduced willingness to spend, and uncertainty were cited by surveyed companies as the main reasons for the downturn in activity.”
Business confidence nevertheless surged to its highest level since July 2022, partly due to recent rate cuts by the European Central Bank. This optimism has supported continued hiring, with some companies expecting a pick-up in activity later this year and into 2025.
Overall, the data suggests that while the immediate post-Olympic period has been challenging, there are signs of resilience and cautious optimism in the French services sector.
The final composite PMI figure for September – which comprises both the services and manufacturing sectors – was also higher than first thought, at 48.6 points, from 53.1 points in August and 47.4 points initially estimated.
That figure has been over the 50-bar only twice since the start of the year, last month and in April.
(Reporting by Benoit Van Overstraeten; Editing by Toby Chopra)
