FX.co ★ France Services PMI Shrinks Less than Initial Estimates

The HCOB France Services PMI improved to 47.9 in March 2025, up from 45.3 in February, exceeding earlier predictions of 46.6. Despite this uptick, the index still indicated the seventh month of contraction, reflecting persistent demand weaknesses within the sector. Production levels continued their downward trend, hindered by challenging economic conditions and reduced client interest. Likewise, new orders contracted for the seventh consecutive month, with new international business declining at the fastest rate observed in the past three months. Employment cuts remained widespread in March, largely attributed to the non-replacement of employees who left voluntarily. On the inflation front, there was some relief as input costs rose at their slowest pace since the previous October. Nevertheless, companies increased the prices they charge to mitigate elevated operating expenses. Business optimism stayed muted, with growth forecasts significantly trailing the historical norm.