Growth in the French services sector weakened in May

Businessmen take advantage of the fine weather at lunchtime under the Arche de la Défense in the financial and business district west of Paris, as warm sunny weather continues in France, on 13 March 2014. REUTERS/Charles Platiau

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PARIS, June 3 (Reuters) – Growth in activity in France’s dominant services sector weakened in May from April, according to a monthly survey, the positive effect of easing COVID-related restrictions -19 having been offset by inflationary pressures.

Data compiler S&P Global said its final Purchasing Managers’ Index (PMI) for the French services sector fell to 58.3 points in May from 58.9 in April. A quick estimate had predicted a May services PMI figure of 58.4 points.

Any number above 50 indicates expansion.

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IHS Markit’s overall composite PMI, which includes the services and manufacturing sectors, also fell to 57.0 points in May from 57.6 in April. A quick estimate had predicted a May composite PMI figure of 57.1 points.

Data released earlier this week showed the French economy contracted unexpectedly in the first quarter as consumers struggled to cope with soaring inflation to a record 5, 8% over 12 months in May. Read more

“The direction of the French economy appears to be critically dependent on what happens in the services sector, given the notable range of headwinds currently facing goods producers. In the near term, indicators of survey suggest economic growth is likely to continue,” said Joe Hayes, senior analyst at S&P Global Market Intelligence.

“Nevertheless, we need to remain mindful of the downside risks at play. Sooner or later, the boost from fewer COVID-19 restrictions will start to wear off. Contagion risks from weak manufacturing, as well as the Producer price inflation, which hit a new series peak in May, also pose significant threats to demand for services,” Hayes added.

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Reporting by Sudip Kar-Gupta; Editing by Toby Chopra

Our standards: The Thomson Reuters Trust Principles.


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