French services growth in December slightly below initial reading -PMI

FILE PHOTO: A closed restaurant in Paris amid the coronavirus disease outbreak
FILE PHOTO: A view shows chairs stacked inside a closed restaurant in Paris as the French government keeps bars and restaurants closed as part of COVID-19 restrictions measures to fight the coronavirus disease outbreak in France, January 5, 2021. REUTERS/Gonzalo Fuentes

January 5, 2022

PARIS (Reuters) – French services sector growth in December came in slightly below an initial estimate, according to a monthly survey, as the impact of the COVID-19 pandemic weighed on business activity.

Data compiler IHS Markit said on Wednesday its Purchasing Managers’ Index (PMI) for the services sector fell to 57.0 points in December, down from 57.4 points in November and slightly below a preliminary reading of 57.1 points.

Nevertheless, the index remained above the 50-point threshold dividing an expansion in activity from a contraction.

A composite PMI index which includes the services and manufacturing sectors fell to 55.8 points in December from 56.1 in November, slightly better than its initial estimate of 55.6.

“Business activity grew at the second-quickest rate since June, outpaced only marginally by that seen in November. Anecdotal evidence suggests that demand for services remains robust, causing backlogs to build and hiring to continue,” said IHS Markit senior economist Joe Hayes.

“That said, new order growth weakened amid a notable dent to demand from overseas clients, reflecting the impact that rising COVID-19 infections had on tourism.”

(Reporting by Sudip Kar-Gupta; Editing by Catherine Evans)