France Services PMI April 2008

Eurozone service sector growth held steady at a slightly slower pace in April as faster growth in Germany contrasted with weakness elsewhere; Spain in particular stood out and reported record job cuts.

The RBS/NTC Eurozone Services Business Activity Index rose from 51.6 in March to 52.0 in April, coming in slightly above the earlier flash estimate of 51.8. However, the rise still indicated only a very modest acceleration in growth, with the rate of increase remaining weak by historical standards of the survey (and only slightly above the average reading for Q1, which had been the weakest quarter since Q2 2003).


France

France's service sector grew at its weakest pace in nearly five years in April as an economic slowdown stemmed the flow of new business, a NTC/CDAF survey showed on Tuesday. Their Purchasing Managers' Index of the French services sector dropped sharply to 52.8, its lowest since August 2003, from 57.3 in March.

"The subdued rise in activity during the latest month marked a significant turnaround from the resilience seen in the first quarter of the year and suggests that deteriorating economic conditions may finally be taking their toll on France's dominant service sector," NTC said in a statement.

New business growth slowed to its weakest since September 2004 as firms reported a general softening in demand and a dearth of client inquiries.

"It looks like consumers have reined in spending on services quite significantly," said Chris Williamson, chief economist at data compiler NTC.

Slowing growth is also jeopardising President Nicolas Sarkozy's goal of cutting unemployment, and the NTC/CDAF survey showed firms in the service sector are already responding to the weaker economic climate by scaling back hiring.
In a sign that inflation pressures are persisting, the survey showed service sector firms continued to raise the prices they charged as their input costs kept increasing.