Investing.com - French private sector activity grew at the fastest pace in ten months in August, easing concerns over the economic outlook of the euro zone’s second largest economy, preliminary data showed on Tuesday.
Markit said that its seasonally adjusted Flash France Composite Output Index, which measures the combined output of both the manufacturing and service sectors rose from 50.1 in July to 51.6 in August, beating expectations for 50.4.
The preliminary services purchasing managers’ index improved to a seasonally adjusted 52.0 this month, a ten-month high. The reading came in above expectations for 50.5 and up from 50.5 in July.
In contrast, the French manufacturing purchasing managers’ index fell to a two-month low of 48.5 this month, missing expectations for 48.8 and down from 48.6 a month earlier.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
New business across the French private sector increased for the second month running during August. That said, the rate of growth remained marginal overall and was slightly weaker than in July.
Service providers reported a second successive monthly rise in business activity during August. Moreover, the rate of growth was the fastest since October 2015. In the manufacturing sector, output was stable following a four-month period of contraction.
Commenting on the report, Jack Kennedy, Senior Economist at Markit said, "France’s private sector economy gathered some momentum in August, raising hopes of a pick-up in GDP growth after the stagnation seen in the second quarter."
EUR/USD was at 1.1341 from around 1.1331 ahead of the release of the data, while EUR/GBP was at 0.8608 from 0.8610 earlier.
Meanwhile, European stock markets were higher after the open. France’s CAC 40 rose 0.4%, the EURO STOXX 50 advanced 0.6%, Germany's DAX tacked on 0.5%, while London’s FTSE 100 inched up 0.5%.