France’s services sector slipped into contraction in April as demand softened amid economic and political uncertainty tied to the Iran war, according to a monthly S&P Global survey released on Wednesday.

The S&P Global France Services final PMI declined to 46.5 in April from 48.8 in March, matching the earlier flash estimate and marking its weakest reading since February 2025.

A PMI reading below 50 indicates contraction in activity, while a figure above 50 signals expansion.

France’s Composite PMI final reading for April, which combines services and manufacturing, also dropped to 47.6 from 48.8 in March, reaching its weakest level since February 2025, Reuters reports.

Moreover, in services, new orders declined at their fastest pace since November 2023, with companies pointing to slower client decision-making, persistent inflation pressures, and geopolitical uncertainty as key factors, according to S&P Global.

Cost pressures also rose further, with input price inflation reaching a 29-month high. This increase was driven by higher energy and raw material costs linked to the impact of the Iran war, according to the report.

“Services ​and manufacturing ​pulled the French ⁠economy in different directions in April. We should probably discount the factory expansion, though, which ​is likely to be fleeting due to ​front-loaded ordering ⁠ahead of anticipated price increases,” according to Joe Hayes, principal economist at S&P Global Market Intelligence. “Services, on the other hand, has ⁠seen ​a significant hit to demand from ​increased uncertainty, with activity in this part of the economy weakening as a ​result.

“What's interesting is that, although input price inflation in the service sector has soared, prices charged have barely moved since February. Given the subdued sales environment, service providers may be hesitant to bring about even further demand destruction. There may also be some expectation from firms that the inflation wave is not here to stay, meaning they are allowing margin compression for the time being,” Hayes went on to add.