French services lead pickup in private sector growth

BLOOMBERG

Growth in France’s private-sector economy accelerated more than analysts anticipated in May, despite a continued contraction in manufacturing, as services expanded at the fastest rate in seven months.
A Purchasing Managers Index for both industries rose to 51.1 from 50.2 in April, London-based Markit Economics said on Monday. That compares with a median forecast of 50.4 in a Bloomberg survey.
A gauge for manufacturing rose to 48.3 from 48, still below the 50-point mark that divides expansion from contraction. A measure for services jumped to 51.8 from 50.6.
The euro area’s second-largest economy surprised economists with growth of 0.5 percent in the first quarter, led by consumer spending and business investment. Business and manufacturing confidence data due this week may provide some clues about whether the pace of expansion can be maintained.
“The French private-sector economy gained momentum in May,” said Jack Kennedy, a senior economist at Markit. “The service sector was the driver, posting its best performance since last October. However, the manufacturing sector continued to show weakness.”
Manufacturers continued to report a fall in new orders and in employment in May, Markit said, while service providers signaled they’re hiring amid an increasing intake of work.
After the French economy’s good performance in the first quarter, PMIs “continue to point to a more subdued trend in private-sector activity midway through the second quarter,” Kennedy said.