France October final services PMI 51.7 vs 51.3 prelim | Forexlive

• Prior 52.9
• Composite PMI 50.2 vs 50.0 prelim
• Prior 51.2

A slightly better revision but it still reaffirms a further slowdown in business activity in France, with overall economic conditions pretty much grinding to a standstill. Inflation pressures remain elevated while business confidence has fallen to its lowest since late 2020. S&P Global notes that:

“As the French manufacturing sector sinks deeper into contraction, the services sector has been left to maintain economic growth. So far, it’s just about doing so – the Composite Output Index recorded just above the crucial 50.0 level in October. However, the underlying trend in the services sector is one of weakness. Both output and new orders rose only marginally in October and at rates that were well beneath their respective long-run averages.

“Although the demand trend has clearly deteriorated, ample order book volumes are helping to sustain growth. Backlogs rose again in October, and this has also helped companies keep the door open for new recruits.

“The main challenge for the services sector is inflation . As client purchasing power is squeezed and real incomes fall, spending will come under pressure. Companies are awake to this risk, as evidenced by business confidence slumping to its lowest level in almost two years in October.”