French services business picks up in August as firms cut prices: PMI

[PARIS] French service sector activity picked up more than initially thought in August as firms stepped up price cuts to win more business, a survey showed on Monday.

Data compiler IHS Markit said its Purchasing Managers' Index (PMI) for services rose in August to 52.3 from 50.5 in July, better than a preliminary reading of 52.0.

The index rose further from the 50-point threshold dividing an expansion in activity from a contraction.

The flow of new business was its strongest since May as firms cut prices at the fastest pace in four months in the face of competitive pressures, IHS Markit said.

"The French service sector saw a pick-up in growth momentum in August, raising hopes of an improved GDP outturn in the third quarter after the stagnation seen in the second quarter," IHS Markit economist Jack Kennedy said.

"That said, a return to net job shedding and a dip in business expectations to the lowest since the turn of the year suggests companies remain somewhat cautious in their outlook amid a persistently muted demand environment."

Markit's overall PMI index, which includes the services and manufacturing sectors, rose to 51.9 from 50.1 in July, better than the 51.6 originally reported.

REUTERS