French Economy Gains Pace in June as Service Growth Spurs Output

(Bloomberg) -- France’s private-sector economy expanded at a quicker-than-expected pace in June as stronger services growth outweighed a further slowdown in manufacturing.

A composite purchasing managers’ index by IHS Markit climbed to 55.6 from 54.2 in May, beating the median estimate in a Bloomberg survey for an unchanged reading. Services firms were supported by increases in new work.

Still, manufacturing sector faced a “number of headwinds” in June, according to Markit Economics Director Paul Smith. Those included delivery delays and rising price pressures for metals, with some respondents saying that higher tariffs had an inflationary impact.

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The report comes just after European Central Bank officials announced they will end bond purchases this year, even amid evidence the region’s economy is going through a soft patch. June’s reading is consistent with growth of 0.3 percent in the second quarter, Markit said.

If the pickup is replicated in figures for Germany and the euro area, due later on Friday, that may give further hope to policy makers that the recent weakness will prove temporary.

The composite PMI for Germany is forecast by economists to hold at 53.4 in June. A gauge for the euro area is seen weakening to 53.9 from 54.1.

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