U.S. Markets

French business activity falls in Oct as services weaken: PMI

FILE PHOTO: People wearing protective face masks walk at the financial and business district of La Defense in Nanterre as France reinforces mask-wearing in public places as part of effrots to curb a resurgence of the coronavirus disease (COVID-19) across France, September 1, 2020. REUTERS/Charles Platiau

PARIS (Reuters) - French business activity fell in October at the fastest pace in five months as the service sector pulled back in the face of new coronavirus restrictions, a monthly survey showed on Wednesday.

Data compiler IHS Markit said its Purchasing Managers’ Index (PMI) fell to 47.5 from 48.5 in September, marginally better than a preliminary reading of 47.3.

The index dropped further away from the 50-point threshold dividing an expansion in activity from a contraction to hit its lowest level since May, when France emerged from a first lockdown to contain the coronavirus outbreak.

“The results point to a worrying trend for business activity, showing that the recent surge in infections and the introduction of new restrictions have already negatively impacted the economy,” IHS Markit economist Eliot Kerr said.

“Moving through the winter months, the downward trajectory is likely to persist, particularly as declines at service providers begin to spill over onto their manufacturing counterparts,” he added.

In October, a government curfew aimed at halting a resurgence of new COVID-19 cases met with little success, leading to a new nationwide lockdown last week.

In the face of the new restrictions, the PMI index for the dominant service sector fell to 46.5 from 47.5 in September, unchanged from a preliminary reading.

The weakness offset an improvement in the manufacturing sector, which remained in expansionary mode, according to already published data.

Reporting by Leigh Thomas; Editing by Catherine Evans