PARIS (Reuters) -French business activity declined faster than expected in October, a survey showed on Friday, as demand for goods and services in the euro zone's second-biggest economy weakened further amid a volatile political climate.
The HCOB France flash purchasing managers index (PMI) for the country's dominant services sector, compiled by S&P Global, came in at 47.1 points in October.
That figure represents a six-month low and the index has now stayed below the 50 points threshold separating
growth from contraction for the 14th month running.
A Reuters poll forecast for the October flash services PMI stood at 48.7 and the final September figure was at 48.5.
The flash manufacturing PMI for this month increased slightly to 48.3 points from 48.2 in September, higher than a 48.2 Reuters poll forecast.
But the flash October composite PMI - which comprises both the services and manufacturing sectors - fell to 46.8 points from 48.1 in September, and again below a forecast for a figure of 48.4 points. That was its sharpest rate of decline in eight months.
"The subdued trend in France's private sector persists," said Jonas Feldhusen, junior economist at Hamburg Commercial Bank. "Output in both manufacturing and services is declining, pointing to broad-based weakness."
Despite the downturn, French firms continued to hire, with employment rising for the third consecutive month, though at a marginal rate.
Looking forward, French businesses remained optimistic about future activity, although expectations have softened due to political uncertainty and weak global economic conditions.
"The forward-looking index for business expectations has worsened further from an already low level," Feldhusen added.
Earlier this month, the Bank of France said the country was on course to grow 0.3% from the second quarter when it also grew 0.3%, despite political upheaval and trade tensions.
(Reporting by Benoit Van Overstraeten; Editing by Toby Chopra)
