Investing.com - French private sector activity grew at the fastest pace in seven months in May, easing concerns over the economic outlook of the euro zone’s second largest economy, preliminary data showed on Monday.
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 50.2 in April to 51.1 in May, beating expectations for 50.2.
The preliminary services purchasing managers’ index improved to a seasonally adjusted 51.8 this month, a seven-month high. The reading came in above expectations for 50.6 and up from 50.6 in April.
In contrast, the French manufacturing purchasing managers’ index inched up to a seasonally adjusted 48.3 this month, missing expectations for 48.8 but up from 48.0 a month earlier.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
New business received by private sector firms in France increased for a second successive month in May. Moreover, the rate of growth quickened slightly, reaching a six-month high.
Service providers recorded a further rise in new work, albeit slightly slower than seen in April. Manufacturers continued to report falling new orders, although the rate of decline eased from the 14-month record seen in April.
Commenting on the report, Jack Kennedy, Senior Economist at Markit said, "First-quarter GDP data showed a surprisingly punchy 0.5% expansion, but the PMIs continue to point to a more subdued trend in private sector activity midway through the second quarter.”
EUR/USD was at 1.1238 from around 1.1235 ahead of the release of the data, while EUR/GBP was at 0.7737 from 0.7735 earlier.
Meanwhile, European stock markets were lower after the open. France’s CAC 40 shed 0.35%, the EURO STOXX 50 dipped 0.45%, Germany's DAX fell 0.25%, while London’s FTSE 100 slumped 0.1%.