Investing.com - French private sector activity slowed slightly but remained solid in July, according to survey data released on Tuesday.
The preliminary reading of the Markit services purchasing managers’ index dipped to a two month low of 55.3 this month from 55.9 in June. Economists had forecast a reading of 55.7.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
Growth in the service sector was buoyed by an increase in new orders. Robust economic conditions and the football World Cup were also cited as factors contributing to growth.
The manufacturing PMI ticked up to a two month high of 53.1 from 52.5 a month earlier, against expectations for 52.6.
Although new orders rose, manufacturing exports were down for the first time since September 2016 amid reports that global trade tensions were hampering foreign demand.
The composite output index, which measures the combined output of both the manufacturing and service sectors declined to a two month low of 54.5 from 55.0. Economists had expected the composite index to tick down to 54.8.
The report said that French companies retained an optimistic outlook with regard to coming 12-month period in July, buoyed by hopes of further demand growth. The degree of optimism ticked up from June and remained strong.
“The French private sector continued to grow at a decent lick at the start of the third quarter. The rate of expansion, however, remains far weaker than seen around the turn of the year", said Alex Gill, economist at survey compiler MarkIt.
“Nevertheless, the rate of job creation and degree of business confidence remained strong at both manufacturers and service providers, suggesting the French private sector is poised for further solid near-term growth.”