July 4, 2018 / 8:56 AM / 9 months ago

French business growth picks up after slowest quarter since 2016 - PMI

Men look at their mobile phones as they walk on the esplanade of La Defense in the financial and business district of La Defense, west of Paris, France March 26, 2018. REUTERS/Gonzalo Fuentes

PARIS, (Reuters) - French private sector activity picked up in June, helped by a rebound in the services sector that more than offset a further slowdown in manufacturing, a survey showed on Wednesday.

Data compiler IHS Markit said its Purchasing Managers’ Index (PMI) for services rose in June to 55.9 from 54.3 in May, lower than a preliminary reading of 56.4.

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

IHS Markit’s overall PMI index, which includes the services and manufacturing sectors, rose to 55.0 from 54.2 in May, again slightly below the 55.6 originally reported.

Despite the rebound in June, activity in the second quarter was the slowest since the final quarter of 2016, the survey showed, signalling that the French economy was struggling to recover from a soft patch seen at the start of the year.

Respondents signalled the strongest increase in operating costs in more than seven years, IHS Markit said, due to rising fuel and transport costs.

Road fuel prices rose to an all-time high in France in May, boosted by higher taxes and crude oil prices.

Reporting by Michel Rose; Editing by Catherine Evans

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