The HCOB France Services PMI rose to 48.9 in May 2025 from 47.3 in April and better than the initial estimates of 47.4. This marked the ninth consecutive month of contraction in the services sector, though the pace eased to the slowest so far this year. The softer decline reflected less marked drops in new business and employment, but demand conditions remained weak, especially in the domestic market. To stimulate sales, firms reduced prices at the fastest rate since February 2021, even as input cost inflation picked up slightly, driven by wages and purchasing costs. Additionally, employment declined again, albeit marginally, as firms sought to cut costs amid subdued growth prospects. Meanwhile, business confidence deteriorated sharply, with year-ahead expectations falling to a five-year low amid geopolitical concerns and economic uncertainty. Surveyed firms reported hesitancy among clients and budget constraints as key drags on activity.