France’s service sector shrank the most in nine months in February, hinting that a nascent economic recovery remains fragile and the country is still lagging behind European peers.

Data compiler Markit said its composite purchasing managers' index - a broader measure of private sector fortunes - fell in February to 47.6 from 48.9 in January, dropping further away from the 50-point threshold dividing an expansion in activity from a contraction.

Markit’s index for the services sector fell to 46.9 from 48.9 in January, a nine-month low that was well under economists’ average expectations for an increase to 49.4.

In the manufacturing sector, the index fell to 48.5 from 49.3 in January, a two-month low that was under the average expectation for a reading of 49.6.

The flow of new orders for private sector companies fell for a fifth month in a row in February, the sharpest rate of contraction since June, with both service providers and manufacturers recording declines in new business.

Private sector employment fell for a fourth consecutive month with slight declines in staffing levels in service and manufacturing firms. Prices charged by firms fell again, albeit at the slowest rate for 5 months.

Hinting that growth in France has so far largely come from abroad despite ongoing reform efforts, Markit’s survey showed that new export orders for manufacturers had increased for the second month in a row.

Reuters