- Prior 49.6
- Composite PMI 48.1 vs 47.3 prelim
- Prior 48.6
The revisions are positive but still marks a drop from September. The details reveal the sharpest drop in new business since January with growth expectations also declining markedly compared to the month before. Cost pressures were subdued but prices charged by French service firms were still on the higher side though. HCOB notes that:
"France’s fourth quarter is off to a poor start, with the services sector continuing to contract. The HCOB PMI dipped to 49.2 in October, marking its lowest point since March. While GDP growth surprised on the upside in Q3 with a 0.4% rise over the previous quarter, it’s now clear that economic momentum is waning. The GDP uptick was largely driven by one-off effects from the Olympic Games in Paris, as shown by the HCOB PMIs, and as demand fades, French service providers — and the wider economy — will struggle to find a new growth catalyst.
"Service providers in France are struggling to lift their charges. Inflationary pressures are benign in France, according to the HCOB PMIs, and this is further reinforced by a notable drop in France’s Consumer Price Index in September — annual inflation fell to 1.1% overall and 1.4% for core inflation, well below the ECB’s target. However, with operating costs still rising much faster than selling prices, this is one of the ongoing challenges for the surveyed businesses, intensifying the strain on the sector.
"Nevertheless, the outlook for French service providers is cautiously optimistic despite growth expectations weakening in October. Current conditions remain challenging, with both domestic and international orders continuing to decline, alongside a hiring freeze. However, there are modest signs of encouragement in future business activity, though the trend is weaker than the previous month and remains well below the historical average. Many companies report that intensified competition and a shrinking customer base are complicating recovery efforts."
