Services are keeping the European economy afloat with strong growth as the rapid decline in manufacturing orders pulls down several of Europe’s key economies.

In France, however, where manufacturing remains resilient, the service sector is contracting. The French service sector fell into contraction in March, according to the HIS Markit purchasing managers index, which dropped from 50.2 in February to 49.1 in March – well below the 50.0 threshold that indicates contraction.

The French service sector was hit by the destruction caused by the violent protests of the Yellow Vest movement with services dropping consistently over the last three months far below the Eurozone average, which was at 53.3 in March.

All other major Eurozone economies outperformed France, including Germany (55.4), Spain (56.8), and Italy (55.3).

The service sector is keeping the Eurozone economy on a positive trajectory, even as the manufacturing sector is contracting. In Germany, the service sector is at its strongest point since September 2018 across hospitality, transport, and other services sectors, driven by near full employment, real wage growth, and domestic demand.

However, the composite German PMI index of both manufacturing and services in Germany slipped in March to 51.4 from 52.8 in February. That is the lowest reading since June 2013.