Financial News: French Private Sector Contracts In January

French Private Sector Contracts In January

01/23/2026 - 04:55:00 (RTTNews)

(RTTNews) - The French private sector experienced a contraction in January, the first time in three months, as clients were hesitant to place orders amidst the ongoing political deadlock regarding the country's fiscal plans, survey results from S&P Global showed Friday.

The HCOB flash composite output index fell to 48.6 in January from 50.0 in December. A score below 50.0 indicates contraction. Economists had forecast the index to rise to 50.1.

The index has remained below the no-change threshold for the first time since October last year.

The decrease in business activity reflected subdued economic conditions and customers holding back on placing orders, S&P said.

The services PMI dropped unexpectedly to a nine-month low of 47.9 in January from 50.1 in the previous month. The score was seen at 50.3.

On the other hand, the factory PMI rose to 51.0 from 50.7 in the prior month. The index was forecast to fall to 50.4 in January.

"The French private sector entered the new year on a muted note," Hamburg Commercial Bank Junior Economist Jonas Feldhusen said.

Renewed tariff threats from the US underscore how fragile the external environment remains, Feldhusen noted. A relatively firm euro and intensifying competition from China further weigh on the outlook for exporters, the economist added.

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