France's private sector activity shrank for the seventh consecutive month in March, as business confidence in the eurozone's second-largest economy dropped to its lowest point since April 2020, according to the findings from a survey released on Monday.

The HCOB flash purchasing managers index (PMI) for France's services sector, compiled by S&P Global, was 46.6 points in March.

While this was an improvement from 45.3 points in February and exceeded a Reuters news agency poll forecast of 46.3 points, the reading still remained below the 50-point threshold, indicating a contraction in activity.

Any reading below 50 points indicates a contraction, while a figure above 50 signals expansion.

Furthermore, in March, the manufacturing flash PMI increased to 48.9 points, up from 45.8 points in February and surpassing the Reuters forecast of 46.5 points.

Whereas the March composite PMI, which includes both the services and manufacturing sectors, increased to 47.0 points from 45.1 points in February.

However, it still indicated a seventh consecutive month of contraction in activity.

S&P Global went on to add that French companies are expecting lower activity levels over the next 12 months, with business sentiment at its lowest in nearly five years.

“France's economy is struggling to gain momentum. Although the HCOB French Flash PMI improved in March compared to the previous month, it remains in contraction territory,” according to Tariq Kamal Chaudhry, economist at Hamburg Commercial Bank.

“France passed a delayed budget law for 2025 in February which helped it avoid a downgrading of its credit rating, but there is still a high degree of uncertainty regarding future economic policy,” he added.