France’s services sector returned to contraction in October, shrinking at its fastest pace in five months as domestic demand weakened and business confidence fell into negative territory for the first time since the early stages of the COVID-19 pandemic.
The S&P Global France Services PMI Business Activity Index dropped to 46.2 from 51.2 in September. Readings below 50 indicate a decline in activity compared with the previous month. New business also fell at its quickest rate in five months, with the drop driven by domestic customers. Export demand, by contrast, edged up for the first time in more than a year.
Employment in the sector declined for a sixth consecutive month. Companies pointed to restructuring, retirements and the end of fixed-term contracts as reasons for reducing headcounts.
Service providers became pessimistic about the 12-month outlook for the first time since April 2020. Nearly 28% of survey respondents reported negative expectations, citing the 2027 presidential election, geopolitical conditions and the global energy crisis as concerns.
Operating costs increased amid higher fuel prices, supplier fees and wages. Companies sought to pass on those costs through price rises, although both input costs and prices charged to customers increased more slowly than in September.
The S&P Global France Composite PMI Output Index, which covers manufacturing and services, fell to 46.6 from 51.1, marking its sharpest decline since May. Both sectors contracted.
Joe Hayes, senior principal economist at S&P Global Market Intelligence, said companies were putting decisions on hold amid signs of stalled domestic demand and investment. He added that the impact of the global energy crisis appeared to be concentrated mainly in goods rather than services. The data were collected from October 12 to 27, 2026.
Sources: Investing.com News.