FX.co ★ France Services Sector Contraction Eases

The HCOB France Services PMI rose to 49.6 in February 2026, in line with preliminary estimates and up from 48.4 in January, indicating a slight contraction in the services sector. New business inflows declined for a third consecutive month, though the rate of decrease eased somewhat, while firms continued to reduce backlogs to sustain activity. Employment increased for the second month running, with both permanent and temporary staff additions contributing to payroll growth.

Overall activity remained muted, weighed down by weak demand—especially from overseas clients—alongside project delays and adverse weather conditions. On the cost side, input price inflation slowed, reflecting softer wage pressures and lower increases in fuel and hardware costs. Output prices edged up only marginally, as firms made limited attempts to pass higher costs on to customers. Business expectations for the year ahead stayed robust, with overall confidence hovering just below January’s 16‑month peak.