French Companies See Fastest Growth in Six Months as Orders Rise

(Bloomberg) -- France’s private sector expanded at the fastest pace in six months with an increase in new orders, another signal that the euro area’s second-largest economy is overcoming its soft patch.

A Purchasing Managers Index rose to 51.3 in May from 50.1 a month earlier, IHS Markit said in its flash reading. The improvement, which topped economists’ expectations, was driven by services.

The tentative signs of an upturn -- Markit still described growth as “modest” -- should strengthen the European Central Bank’s conviction that euro area will slowly get back on track this year after a wobble in the second half of 2018.

“The latest PMI results pointed to an improved performance by the French private sector,” said Eliot Kerr, an economist at IHS Markit. “Moreover, a further recovery in new orders and business expectations point to a sustained rise in activity.”

While orders increased in May, companies continued to suffer from a broad-based decline in new business from abroad. Still, French businesses remained confident that output will rise in coming months, even if their level of optimism eased “sharply” from April.

They also continued to hire new workers with the pace of job creation rising to its fastest pace in six months.

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