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French factory activity contracts at slowest pace in 12 months in May

Published 05/21/2015, 03:09 AM
Updated 05/21/2015, 03:09 AM
© Reuters. French manufacturing activity improves in May

Investing.com - Manufacturing activity in France contracted at the slowest pace in 12 months in May, boosting optimism over the economic outlook of the euro zone’s second largest economy, preliminary data showed on Thursday.

In a report, market research group Markit said that its preliminary French manufacturing purchasing managers’ index inched up to a seasonally adjusted 49.3 this month from a final reading of 48.0 in April. Analysts had expected the index to rise to 48.5 in May.

Meanwhile, the preliminary services purchasing managers’ index rose to a seasonally adjusted 51.6 this month from 51.4 in April, below expectations for a reading of 51.9.

The seasonally adjusted Markit Flash France Composite Output Index, which measures the combined output of both the manufacturing and service sectors increased from 50.6 in April to 51.0 in May.

A reading above 50.0 on the index indicates industry expansion, below indicates contraction.

Commenting on the report, Jack Kennedy, Senior Economist at Markit said, "The French private sector posted further modest output growth in May, suggesting that economic expansion is being maintained through the second quarter."

The data suggest that first-quarter GDP will show a modest rise following the 0.1% increase in the final quarter of 2014."

EUR/USD was trading at 1.1111 from around 1.1101 ahead of the release of the data, while EUR/GBP was at 0.7151 from 0.7149 earlier.

Meanwhile, European stock markets were mildly lower after the open. France’s CAC 40 shed 0.1%, the EURO STOXX 50 lost 0.25%, Germany's DAX slumped 0.2%, while London’s FTSE 100 inched up 0.1%.

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