French Manufacturing Propels Economic Growth as Services SlowBy
PMI industry index rose to 55.8 in August from 54.9 in July
IHS economist sees signs unemployment will continue to decline
French manufacturing unexpectedly expanded at the fastest pace since 2011, underpinning a recovery in the euro area’s second-largest economy that was long in the making.
A Purchasing Managers’ Index for the industry rose to 55.8 in August from 54.9 in July, according to IHS Markit. Economists surveyed by Bloomberg predicted the gauge would signal a slowdown in factory activity. A PMI for services fell to a seven-month low of 55.5.
The French economy is enjoying its strongest continuous expansion since 2011 -- finally catching up with its European peers -- after the election of Emmanuel Macron as president bolstered sentiment. The Labor Ministry is set to give unions a preview this week of its plans to overhaul the employment market.
“The data are particularly promising for the manufacturing sector, with output and new order growth at multi-year highs,” said Alex Gill, an economist at IHS Markit. “With capacity pressures intensifying, signs are that unemployment will continue to decline in the third quarter.”
A composite PMI for French manufacturing and services remained at 55.6 in August.
A gauge for Germany due at 9:30 a.m. Frankfurt time probably also held at its July reading. Economists predict a PMI for the euro area will slip to 55.5 from 55.7. That data is due at 10 a.m.
— With assistance by Catherine Bosley, and Mark Evans