FX.co ★ France Services PMI Posts Sharpest Drop in 9 Months

The HCOB France Services PMI slipped to 47.9 in January 2026, down from 50.1 in December, according to preliminary data. This drop signifies the most significant contraction in service sector activity over the past nine months. The downturn is attributed to sluggish economic conditions and customer reluctance to place orders, fueled by ongoing political uncertainty about the national budget. The volume of new business saw a notable decline, with service providers reporting a much more pronounced decrease in demand compared to manufacturers. As a result, work backlogs continued to decrease, while job growth was only marginal, indicating a cautious approach to hiring. On the pricing front, average charges remained flat as clients capitalized on advantageous buyer conditions, although input cost inflation remained significantly below historic levels, despite a slight increase. In conclusion, business expectations have shown improvement, with firms expressing greater optimism for the coming year, hopeful for a resolution to the budget deadlock, although overall sentiment is still tempered by weak demand conditions.