French services pick up, offsetting factory weakness: PMIs

[PARIS] Activity in the French private sector accelerated to a six-month high in May, driven by a pick-up in the dominant services sector that offset weakness in manufacturing, a survey showed on Friday.

Data compiler Markit said its purchasing managers index for services rose in May to 51.6 from 50.6 in April, the fastest rate of growth in seven months, although that was slightly lower than a preliminary reading of 51.8.

The index rose further above the 50-point threshold dividing an expansion in activity from a contraction.

Markit's overall PMI index, which includes services and manufacturing, rose to 50.9 from 50.2 the previous month, also slightly down on the 51.1 originally reported.

The final reading was the highest since November, when Islamist attacks killed 130 people in Paris bars and cafes, a stadium and a concert hall, hurting business at hotels and restaurants, which Markit said remained the weakest spots.

"A further build-up in backlogs of work should help support activity growth in the near term," Markit economist Jack Kennedy said.

"However, an anaemic pace of job creation alongside softer business expectations suggests that service sector companies are not overly confident this marks a convincing shift into a higher gear," he said.

The employment sub-index in the services sector fell to 50.2 in May from 50.8 in April, again lower than the 50.9 initially reported.

However, official figures have started to show an improvement in employment. The number of jobless people in France fell for the second consecutive month in April .

REUTERS