The S&P Global France Services PMI came in at 44.3 in May 2026, revised up from an initial reading of 42.9 but still lower than April’s 46.5 figure, signalling the steepest drop in activity since November 2020.

Business conditions worsened further on the demand side, as new orders fell at their fastest rate in five-and-a-half years, driven by weakening client demand and increasing cost pressures.

In addition, export demand also fell sharply, marking one of the steepest drops since the series began in 2014, according to a report by Investing Live.

On the pricing side, input cost inflation picked up pace, reaching its highest level in just over three years, driven by rising fuel, raw material, and computer hardware expenses.

Meanwhile, French service firms increased their prices in the middle of the second quarter, as sharply rising costs led to some of those pressures being passed on to customers. Output prices rose at their fastest pace since June 2023.

At the same time, labour market conditions deteriorated, with employment declining at its quickest rate since February this year.

In the meantime, business confidence fell to its lowest level in a year, as concerns over inflation and uncertainty linked to the Middle East conflict weighed on the economic outlook.

“France's service sector, which had already been showing vulnerability prior to the outbreak of war in the Middle East, suffered a heavy setback in May. Further falls in the PMI measures of activity and new business took them down to levels which ring recession alarm bells,” said S&P Global.

“Geopolitical uncertainty is restricting decision-making, while surging price pressures are eroding purchasing power. It's hard to see how France's economy can spring back to life against this backdrop, strongly raising the prospect of a contraction in GDP for the second quarter,” the ratings agency went on to add.