French Activity Stabilizes as Yellow-Vest Disruption Wanes

(Bloomberg) -- France’s economy got off to an encouraging start in the second quarter, with business activity stabilizing as disruption from yellow-vest protests waned.

A Purchasing Managers’ Index, which gauges private-sector activity in the euro area’s second-largest economy, inched up to 50 from 48.9 in March, IHS Markit said on Thursday. The reading beat economists’ expectations, which were for a number below the 50 mark that divides expansion from contraction.

French Activity Stabilizes as Yellow-Vest Disruption Wanes

“The stabilization of output in April is further evidence of the dwindling economic impact of the ‘gilets jaunes’ demonstrations,” said Eliot Kerr, an economist at IHS Markit.

But with news orders falling for a fifth month -- albeit at a slower pace -- he said an “underlying slowdown in demand remains evident.”

The report leaves the European Central Bank with no clear evidence that the economy is now poised to accelerate in the latter part of the year. Policy makers are hoping for some clues before their next meeting in June, when they may need to decide if more monetary support is needed.

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