French service sector plunges into deepest recession ever - PMI

PARIS (Reuters) - The French service sector shrank at the fastest rate on record last month as the coronavirus lockdown forced businesses to shut down across the country, a survey showed on Friday.

FILE PHOTO: A view shows the deserted Arc de Triomphe in Paris as a lockdown is imposed to slow the spreading of the coronavirus disease (COVID-19) in France, March 31, 2020. REUTERS/Gonzalo Fuentes

Data compiler IHS Markit said its purchasing managers index for services fell to 27.4 from 52.5 in February, even lower than a preliminary reading of 29.0.

The freefall brought the index to its lowest level since the survey began in 1998 and took it far below the 50 point threshold between an expansion and a contraction in business.

The lockdown, in place since March 17, has left the economy operating at two-thirds of its normal level, according to estimates from the INSEE official stats agency.

Meanwhile, 425,000 firms have sought to put nearly 3.9 million workers - one in five private-sector workers - on a state-subsidised furlough scheme to cope with the collapse in activity.

“March PMI data painted an ugly picture for the French service sector, with output and new business falling at record pace amid shutdowns due to the coronavirus,” IHS Markit economist Eliot Kerr said.

The composite PMI index covering both the services and manufacturing sectors slumped to 28.9 in March from 52.0 in February, lower than the 30.2 initially reported.

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Reporting by Leigh Thomas; Editing by Hugh Lawson