French private sector activity contracts further in June, PMI shows

PARIS (Reuters) -French private sector activity contracted further in June, as weakness in both the manufacturing and services sectors hit the euro zone's second-biggest economy, S&P Global said on Monday.

The flash PMI for France's dominant services sector for June stood at 48.7 points, down from 48.9 points in May. A Reuters poll had forecast 49.2 points for the June flash services PMI.

Any figure below 50 points shows a contraction in activity, while above 50 shows an expansion.

The June flash manufacturing PMI came in at 47.8 points, down from 49.8 in May and below a Reuters poll which had forecast 50.0 points.

The June flash composite PMI - which comprises both the services and manufacturing sectors - stood at 48.5 points, down from 49.3 in May and also below a Reuters poll which forecast 49.3 points.

The manufacturing sector was impacted by excess stocks among clients, challenging market conditions, and order postponements. New orders fell for the thirteenth consecutive month, with factory orders experiencing the fastest decline since February.

Geopolitical tensions, such as uncertainty over tariffs and the war between Israel and Iran, also hit business activity.

"The outlook is certainly clouded, as domestic demand for goods has weakened, as indicated by the decline in new orders," said Hamburg Commercial Bank junior economist Jonas Feldhusen.

"While the ECB's interest rate cuts, deregulation efforts at the EU level, and planned defence investments are likely to continue providing support to the manufacturing sector, uncertainties surrounding global trade and geopolitics – now further exacerbated by escalations in the Middle East – as well as global competition, are dampening the outlook," he added.

(Reporting by Sudip Kar-Gupta; Editing by Toby Chopra)

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