France continues to drag on Eurozone growth, December services PMIs show

The French economy continued to lag behind peers and act as a drag on the wider euro area economy at the end of 2015, the final results of one of the most widely-followed surveys revealed.

Markit's Eurozone services sector purchasing managers' index edged higher from a preliminary reading of 54.2 in November to 54.3 in December - a four-month high - and came in comfortably ahead of the preliminary estimate of 54.0.

“It’s particularly encouraging to see firms taking on staff in increased numbers, suggesting that businesses are preparing for stronger demand in the coming year by boosting capacity," Chris Williamson, chief economist at Markit, said in a statement.

For the fourth quarter of 2015 as a whole service sector activity in the euro block was at its strongest in four and a half years, the survey compiler said.

Eurozone's second largest economy lags behind

Nonetheless, whereas levels of activity in Germany, Italy and Spain - three of the currency bloc's largest economies - continued to be solid, France's service sector PMI for December was revised lower from 50.3 to 50.1.

“Despite the improvement, the survey data signal a modest 0.4% increase in GDP in the fourth quarter, which would mean the Eurozone grew 1.5% in 2015. Given that we have seen almost a year’s worth of quantitative easing, there is a concern that policy is proving somewhat ineffectual.

“But dig deeper into the numbers and the concern is mainly focused on France. Germany, Italy, Spain and Ireland are all enjoying strong expansions, but France is showing signs of stalling once again. A rebound in France is needed to help drive a strong year of growth for the region as a whole," Williamson added.