PARIS (Reuters) – France’s dominant service sector saw employment decline for the first time in four years in December, as businesses grappled with weak demand and political uncertainty, S&P Global’s PMI survey showed on Monday.
The HCOB France Services PMI rose to 49.3 in December from a 10-month low of 46.9 in November, remaining below the 50.0 mark that separates growth from contraction, pointing to a continued, albeit slower, decline in business activity.
The contraction in new orders also eased, with December marking the softest fall since September. However, political uncertainty and challenges in securing loans remained significant constraints, survey participants said.
“Service providers’ pricing power is suffering more due to the current demand weakness,” said Dr Tariq Kamal Chaudhry, Economist at Hamburg Commercial Bank.
The decline in employment was mainly driven by non-renewal of temporary contracts and voluntary departures not being replaced rather than redundancies, according to the survey.
The composite PMI, which includes both manufacturing and services, rose to 47.5 in December from 45.9 in November, indicating a continued contraction in France’s private-sector output.
(Reporting by Tassilo Hummel; Editing by Hugh Lawson)
