April 23, 2018 / 7:05 AM / 10 months ago

French private sector growth picks up in April - PMI

PARIS (Reuters) - Activity in the French private sector unexpectedly rebounded in April despite a wave of rolling strikes by railway workers, a survey showed on Monday, signalling a strong recovery was not being blown off course.

Data compiler IHS Markit said its composite preliminary manufacturing Purchasing Managers’ Index (PMI) rose to 56.9 in April from 56.3 in March, defying expectations for a drop to 55.9 in a Reuters poll of economists.

The positive surprise came from the dominant service sector, whose PMI increased to 57.4 in April from 56.9 in March, higher than economists’ average forecast of 56.5 and above the 50-point threshold demarcating an expansion from a contraction.

In the manufacturing sector, the index fell to 53.4 this month from 53.7 in March, a touch below expectations and the lowest point in 13 months. But the manufacturing output sub-index rose to 54.7 from 53.9.

The French economy was resilient in the face of rolling strikes launched by railway workers since April 3 to protest against President Emmanuel Macron’s reform of state-owned rail company SNCF, causing widespread disruption.

“Without that strike impact, you would have had a nicer rebound,” IHS Markit’s chief economist Chris Williamson said, adding that respondents expected to see an impact over the three months the strikes are planned to last.

But the strikes are not expected to derail the recovery in the euro zone’s second-largest economy.

“After having shown signs of slowing in recent months, the data will buoy hopes that the renaissance in the French economy has far from run its course,” IHS Markit economist Alex Gill said.

Reporting by Michel Rose; Editing by Catherine Evans

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