An index of French factory and services output rose to its highest in almost four years this month, evidence the economy is gaining strength.
Markit Economics said on Tuesday its Purchasing Managers Index rose to 53.4 from 52 in May. That’s the strongest since August 2011 and exceeded the median forecast of economists for an unchanged reading. A gauge of manufacturing increased to 50.5 from 49.4, the first time it’s indicated growth since April 2014, and a measure for services climbed to 54.1 from 52.8.
With cheaper oil and a weaker euro providing a boost to consumers and businesses, the International Monetary Fund predicts growth in Europe’s second-largest economy will exceed 1 percent in 2015, more than twice the pace of last year. Economists are now watching to see if the uplift is strong enough to prompt businesses to invest and propel expansion further in the coming year.
“The French economy gained further growth momentum in June, driven by a stronger service-sector performance and a stabilization in manufacturing,” said Jack Kennedy, an economist at Markit. “With service-sector business expectations standing at the highest level for over three years, it seems firms are becoming increasingly optimistic of a convincing upturn in activity.”
The data “bode well” for second-quarter gross domestic product, following the 0.6 percent expansion in the first quarter, he said.
Markit will publish its measures for the 19-nation euro-area at 9 a.m. London time. The region’s composite index is forecast to have slipped to 53.5 from 53.6 in May, according to a survey of economists.