France Services PMI Contracts in August

France’s August PMI readings across services and the private sector point to renewed weakness in the economy, with the HCOB services PMI slipping to 48.4 and signaling contraction as new orders and confidence wane. Collectively, the data suggest the eurozone’s second-largest economy remains on a subdued growth path, complicating prospects for a near-term pickup and feeding expectations for a cautious ECB stance. While manufacturing showed some resilience or even growth, the services drag persisted and demand conditions stayed soft, contributing to a broader picture of a fragile private sector. Some reports noted easing input price inflation, hinting at softer cost pressures even as output charges remained elevated. The broader business climate gauge in August nudged higher but stayed below the long-term average, underscoring persistent caution among firms as the economy navigates heat-related disruptions and global headwinds. These mixed signals keep policymakers and investors focused on the trajectory of consumer spending, hiring, and inflation as the quarter unfolds.