Eurozone services PMI marginally slips to 51.6 in August, composite holds at 52

Paris, September 3 - France's services sector contracted more than anticipated in August, according to a business survey released on Thursday. The S&P Global Final Services PMI for August fell to 48.0 points from 49.6 in July, indicating a decline in activity. A reading below 50 suggests contraction, while above 50 indicates expansion.

The final reading was slightly lower than the preliminary figure of 48.4. New business orders declined after a marginal gain in July, marking the eighth contraction in the past nine months. Sales to international clients fell at the fastest pace since May. Backlogs of work shrank at the sharpest pace in four months, continuing the current decline for 12 months.

Employment also fell for a fourth consecutive month, with the pace of job shedding easing. Price pressures increased in August, with charges rising at the fastest pace in three months and input cost inflation rising for the first time since May, with fuel often cited as a source of pressure. The August composite PMI, which includes both services and manufacturing sectors, declined to 48.5 points from 49.4 in July, also falling short of a flash August composite PMI figure of 48.8.

S&P Global economist Joe Hayes noted that the August numbers might be somewhat discounted due to the extreme heat experienced this summer. However, he warned that the outlook remains challenging for France, with companies cautious towards the year ahead due to the looming 2027 election period. Confidence remains well below its long-term average.