Key facts
- France's services sector PMI fell to 48.0 in August, indicating a faster contraction.
- Weaker demand and extreme heat contributed to the downturn in France's services activity.
- Germany's services sector PMI edged down to 49.7 in August, but remained above the initial reading.
- German services sector new business and export sales increased in August.
- German service providers increased staffing for the first time in eight months.
France's services sector experienced a more significant contraction in August than initially anticipated, with the S&P Global France Final Services PMI dropping to 48.0 from 49.6 in July. This downturn was attributed to weaker demand and the impact of extreme summer heat. New business fell, marking the eighth deterioration in nine months, and sales to international clients declined at the fastest pace since May. Backlogs of work saw their sharpest decrease in four months, and employment continued to fall for the fourth consecutive month. Price pressures picked up, with charges rising at the fastest pace in three months. The overall composite PMI for France declined to 48.5.
In contrast, Germany's services sector showed signs of stabilization, with the final S&P Global Germany Services PMI at 49.7 in August, above the initial reading of 48.5 and July's 49.8. This marginal contraction was attributed to headwinds from tougher financial conditions, high costs, and customer caution. However, new business increased for the second consecutive month at a quicker pace, and export sales returned to growth for the first time since February. Service providers added staff for the first time in eight months, with the pace of job creation the quickest since October last year. The final S&P Global Germany Composite PMI rose to 51.8 in August from 51.3 the month before.