French services sector growth eased up in January: PMI

PARIS (Reuters) – Growth in France’s dominant services sector eased in January compared to December, a survey showed on Wednesday, as the euro zone’s second-biggest economy grapples with the impact of nationwide strikes.

Data compiler IHS Markit said its Purchasing Managers’ Index (PMI) for the services sector fell to 51.0 in January from 52.4 in December, its slowest rise in nine months.

A reading of above 50 points signals an expansion in activity compared to a contraction.

IHS Markit’s overall composite PMI index, which includes the services manufacturing sectors, fell to 51.1 in January from 52.0 in December.

Data at the end of last month showed that France’s economy had unexpectedly shrunk in the final quarter of 2019, as output slumped in the face of strikes over an unpopular pension reform.

“The French private sector began 2020 with a sluggish performance, as growth in both output and new orders eased to their slowest since September,” said IHS Markit economist Eliot Kerr.

Kerr said January’s PMI results pointed to economic growth of around 0.2%.

“The weakness stemmed from the service sector, where a softer expansion in activity more than offset a quicker rise in manufacturing production. Similarly, dampened new business growth in services outweighed a rebound in manufacturing,” added Kerr.

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