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French service sector activity grows slightly in January: PMI

[PARIS] French service sector activity returned to growth in January, albeit at a meagre pace as hotels and restaurants continued to struggle following November's Islamist militant attacks in Paris.

Data compiler Markit said its purchasing managers index for services edged up to 50.3 from 49.8 in December, slightly lower than a preliminary reading of 50.6.

The marginal improvement brought the index above the 50-point threshold dividing an expansion in activity from a contraction.

"Lacklustre demand continued to weigh on the performance of the sector, with new orders rising at a below-trend pace,"Markit senior economist Jack Kennedy said.

"An improvement in service providers' future expectations to a five-month high offered some modest encouragement, but there remains little to suggest that the sector will break out of its persistently sluggish performance amid a fragile business climate," he added.

Markit said that the hotel and restaurant sector reported continued weakness following the Nov 13 attacks on a Paris concert hall, cafes and a stadium that killed 130 people.

Markit's overall PMI index, which includes the services and manufacturing sectors, rose marginally to 50.2 from 50.1 in December, worse than the 50.5 originally reported.