French business morale hits five-month low on new lockdown

French business confidence dropped in November to a five-month low as the country entered a new coronavirus lockdown, hitting the services sector particularly hard, a survey showed on Tuesday.

INSEE, the official stats agency, said its monthly business climate index fell to 79 from 92 in October, the lowest reading since June, when France was still emerging from its first lockdown.

French President Emmanuel Macron is due to announce on Tuesday evening a relaxation of the second lockdown following a decline in new case numbers since it was imposed on Oct. 30.

Less stringent than the first lockdown, the latest restrictions have hurt the euro zone’s second-biggest economy less, high-frequency data ranging from Google (NASDAQ:GOOGL) user location history to electricity demand suggest.

Nonetheless, the dominant service sector has suffered, bearing the brunt of the economic fallout. Already struggling restaurants, hotels and non-essential were forced to shut down for the second time this year.

INSEE’s business climate index for services fell to 77 in November from 89 in October, also hitting the lowest level since June.

With factories able to keep operating despite the lockdown, manufacturing fared much better. Its index fell only to 92 from 94 last month, better than economists’ average forecast for 91 in a Reuters poll.