Investing.com - French private sector output rose in October despite a slowdown in manufacturing activity, according to data released on Wednesday.
The preliminary reading of the Markit services purchasing managers’ index came in at a four-month high of 55.6 this month, up from 54.8 in September. Economists had expected the index to tick down to 54.7.
A reading above 50.0 on the index indicates expansion, below indicates contraction.
The manufacturing PMI fell to a 25-month low of 51.2, compared to expectations for 52.4 and from 52.5 a month earlier. The report said a decline in demand across the automotive sector led businesses to reduce production.
The composite output index, which measures the combined output of both the manufacturing and service sectors rose to a two-month high of 54.3 from 54.0, beating expectations for 53.8.
“October data signalled a mixed picture for the French private sector. On one hand, service sector activity growth accelerated to a four-month high thanks to stronger new business growth. On the other hand, the manufacturing sector shifted down a gear in October, as firms reported the first fall of output for over two years," Sam Teague, economist at survey compiler Markit said.
Job creation accelerated, with the rate of employment growth the strongest since April. The improvement was driven by stronger growth in the service sector, as jobs rose in manufacturing only slightly.
The report said business confidence remained strongly optimistic, but noted that positive sentiment eased fractionally since September, partly due to a deterioration in business confidence among manufacturing firms to the lowest in 28 months.