French business activity expands in March

PARIS: French business activity expanded more than expected in March to reach a near six-year high as improving demand helped firms shrug off uncertainty about the upcoming presidential election, a survey showed.

Data compiler IHS Markit said that its preliminary reading of its monthly purchasing manager rose to 57.6 this month from 55.9, reaching the highest level since May 2011.

The reading not only lifted the index further away from the 50-point threshold between a contraction and expansion in activity but also beat economists’ average forecast for 55.6 and the highest estimate in Reuters poll, which was for 56.0.

“The domestic market is proving to be the key driver,” His Markit Chief Economist Chris Williamson said. “We’re getting increasing anecdotal evidence that companies are becoming more optimistic about the outlook with a change of government with more business friendly policies,” he added.

Polls suggest that centrist Emmanuel Macron, a former investment banker and economy minister, will win France’s two-round April May presidential vote.

A breakdown of the survey results showed that index for France’s dominant services sector jumped to 58.5 from 56.4, beating expectations for 56.1 by a wide margin. Boosted by a jump in new orders, the manufacturing sector also its index improve, rising to 53.4 from 52.2, topping expectations for 52.4.

With PMIs at theses levels, Williamson said that France could probably expect economic growth of about 0.6 per cent in the first quarter. — Reuters