Preliminary May services PMI 49.4 vs 51.3 in April (Il Sole 24 Ore Radiocor) - London , 23 May - France's purchasing managers' index for the manufacturing sector in May rose to a three-month high of 46.7 from 45.3 in April, while that for the services sector decreased to a two-month low of 49.4, down from 51.3 in April, according to preliminary data released by S&P Global and the Hamburg Commercial Bank.

The manufacturing PMI output index rose to 47.3 from 46.8 in April, a two-month high.

The composite PMI output index, a weighted average of manufacturing output and services PMI, was at a two-month low of 49.1 against 50.5 the earlier month.

A reading below 50 signals contracting sector activity, while one above an expansion.

'The French economy will grow in the second quarter thanks to strong domestic demand," said Norman Liebke, economist at Hamburg Commercial Bank. "Although the HCOB Composite Output PMI fell slightly below 50 in May, there is no reason for any major concern. Demand has grown for the first time in over a year and employment is still growing robustly. Our HCOB Nowcast expects 0.3% economic growth for the second quarter.

While this is strong compared to the last few quarters, it is still slightly below the previous estimate due to the worse-than-expected HCOB PMI figures, down from 0.4%.

'The French services sector is showing signs of a sustainable upward trend. The sub-index of new business is confirming this, showcasing stronger overall demand. Although business activity declined, it did only slightly and at a considerably softer pace when compared to the past months. Moreover, although slowing, employment continues to grow at a solid pace.

'France's manufacturing sector is slowly making a comeback.

Although the HCOB Manufacturing PMI and the Output PMI are both still below 50, they recovered clearly since their low in December last year. The amelioration of French manufacturing comes also with higher price pressures. Output prices increased for the first time since May 2023.".

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(RADIOCOR) 23-05-24 09:34:50 (0223) 5 NNNN