The HCOB France Services PMI fell to 48.5 in July 2025 from 49.6 in June, revised down from the initial estimate of 49.7. This marked the fastest contraction in services activity since April and extended the sector’s decline to eleven consecutive months. Output and new orders fell at a quicker pace, mainly due to weak domestic demand, as clients delayed decisions amid political uncertainty. Export business, however, showed slight growth. Employment declined again, with firms citing the non-renewal of temporary contracts and the decision not to replace voluntary leavers due to subdued workloads. Backlogs of work continued to fall as firms focused on clearing existing orders. On prices, input cost inflation remained modest, driven by rising wages and material costs. As a result, prices charged rose only slightly, constrained by strong competition. Looking ahead, business confidence deteriorated sharply after a rebound in June, with optimism falling to its lowest level since mid-2021.