Financial News: French Private Sector Contracts On Weaker Services Activit

French Private Sector Contracts On Weaker Services Activity

08/21/2026 - 07:39:00 (RTTNews)

(RTTNews) - France's private sector contracted further in August due to the downturn in services activity, survey data from S&P Global showed Friday.

The headline composite output index fell to 48.8 in August from 49.4 in July. A score below 50.0 indicates contraction and it was also below forecast of 49.5.

The downturn in overall activity was entirely driven by services companies as manufacturing output grew for the first time since April. In some cases, extreme heat was cited as a reason for lower activity levels.

The services Purchasing Managers' Index posted 48.4, down from 49.6 in the prior month. Meanwhile, the factory PMI improved to 51.5 in August from 49.8 in July.

"The flash PMI report revealed another month of frail economic conditions, with some firms, mainly in the service sector, highlighting the extreme heat as a reason for lower activity and demand," S&P Global Market Intelligence Senior Principal Economist Joe Hayes said.

Demand for both goods and services decreased at a quicker pace, and employment fell for the fourth consecutive month.

Meanwhile, input price inflation slowed to a five-month low, indicating receding cost pressures. Nonetheless, the rate of increase in output charges was broadly unchanged in August.

Both manufacturers and service providers registered faster backlog clearances than in July, the survey showed.

Further, there was a fresh deterioration in business confidence. After hitting a four-month high in July, optimism towards the year-ahead outlook for business activity weakened to its lowest level since May.

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