Published by Global Banking & Finance Review®
Posted on February 4, 2026
2 min readLast updated: February 4, 2026
Add as preferred source on GoogleFrance's services sector contracted in January for the first time since October, with the PMI at 48.4. Economic policies and future expectations are key factors.
PARIS, Feb 4(Reuters) - France's services sector contracted in January for the first time since October, as new business fell at the fastest pace in six months, according to a monthly survey from S&P Global.
The HCOB France services final PMI fell to 48.4 points in January from 50.1 in December, although the final PMI figure was a bit better than the flash January services PMI of 47.9 points.
The services PMI figure fell below the 50.0 points level that separates growth from contraction for the first time since October, and S&P Global said the sector had been hit by weaker demand and a fall in new business intakes.
The January final composite PMI, which includes both the services and manufacturing sectors, also fell to 49.1 points from 50.0 in December.
Nevertheless, S&P Global said businesses could get a boost from the fact that France adopted a budget for 2026 this week, heralding a period of relative stability for Prime Minister Sebastien Lecornu's weak minority government.
"At the start of the year, France's service sector experienced a fresh setback. Order books were notably sparse, with clients displaying caution," said Hamburg Commercial Bank junior economist Jonas Feldhusen.
"Against this backdrop, it is all the more noteworthy that forward‑looking business expectations have risen significantly. This optimism appears to rest on the assumption that a resolution to the protracted budget deadlock will help reduce uncertainty, thereby supporting both consumption and investment momentum," he added.
(Reporting by Sudip Kar-Gupta; Editing by Joe Bavier)
Contraction refers to a decline in national output, typically measured by GDP. It indicates a slowdown in economic activity and is often associated with reduced consumer spending and business investment.
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