France Services Sector Edges Up in June

France's S&P Global Services PMI rose to 46.8, revised down from the preliminary estimate of 47.4, in June 2026 from 44.3 in May, marking its first increase since February. The latest reading signaled a softer contraction in business activity but remained below the 50.0 threshold. The decline in output and new orders eased to the slowest pace since March as firms continued to cite weak demand, higher prices, and the Middle East conflict as key headwinds, though export demand showed signs of improvement. Employment fell for a fifth consecutive month, but the pace of job cuts slowed. On the pricing front, input cost inflation eased to a three-month low despite continued increases in fuel, energy, and wage costs, while output price inflation moderated. Business confidence also improved slightly after four months of declining sentiment.

The S&P Global France Services PMI rose to 47.4 in June 2026, picking up from a more than five-year low of 44.3 in the previous month and better than market expectations of 45.5, flash estimates showed. It marked the highest reading since March, as business activity contracted at a slower pace amid tentative improvements in new orders and client demand. On the pricing front, inflationary pressures softened from the previous month but remained significantly elevated compared with levels seen before the outbreak of the Middle East conflict. Looking ahead, business expectations for the next twelve months improved for the first time this year. However, overall optimism remained subdued by historical standards, as rising fuel costs, ongoing geopolitical tensions in the Middle East, and broader economic uncertainty continued to weigh on confidence.

The S&P Global France Services PMI fell to 44.3 in May 2026, revised upward from the preliminary estimate of 42.9, but remained below April's 46.5, marking the sharpest contraction in business activity since November 2020. Demand conditions deteriorated further, with new orders declining at the fastest pace in five-and-a-half years amid weaker client demand and rising cost pressures. Export demand also contracted sharply, recording one of the steepest declines since the series began in 2014. On prices, input cost inflation accelerated to its highest level in just over three years, driven by higher fuel, raw material, and computer hardware costs. Firms responded by raising selling prices at the fastest pace since June 2023. Labor market conditions weakened, with employment falling at the sharpest rate since February 2025. Meanwhile, business sentiment dropped to a one-year low as inflation concerns and uncertainty surrounding the Middle East conflict weighed on the outlook.