French business activity slowed more than initially forecast in June - Reuters

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A passer by looks through a Zara storefront window, which has a discount sign displayed, in Paris, France, June 10, 2022. REUTERS/Sarah Meyssonnier

PARIS, July 5 (Reuters) - French business activity slowed by more than initially forecast in June, as inflationary pressures weighed on the euro zone's second-biggest economy, a survey showed on Tuesday.

Data compiler S&P Global said its final Purchasing Managers' Index (PMI) for France's services sector fell to 53.9 points in June from 58.3 in May - worse than a flash forecast which had given a figure of 54.4 points for the June number.

Any reading above the 50 point mark indicates growth.

S&P Global's overall composite PMI index, which includes the services and manufacturing sectors, fell to 52.5 points in June from 57.0 in May - also coming in below a flash forecast of 52.8 points for the June composite figure.

Last month, the French government cut its 2022 economic growth forecast, partly because of inflation pressures. It said growth was now expected to be 2.5% in 2022, down from a previous estimate of 4%, with the Omicron COVID wave at the start of the year also having an impact. read more

"While the French service sector remained inside growth territory at the end of the second quarter, there was a clear loss of momentum over the month as respondents to the PMI survey pointed to customer hesitancy in the face of uncertain economic conditions," said Andrew Harker, Economics Director at S&P Global Market Intelligence.

"With manufacturing output falling and service sector growth slowing, the economic warning lights are flashing as the third quarter begins," added Harker.

Reporting by Sudip Kar-Gupta; Editing by Catherine Evans

Our Standards: The Thomson Reuters Trust Principles.

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