French economy shows strong spurt: index

19th April 2011, Comments 0 comments

The French economy is showing signs of exceptional vigour in April led by robust activity in the services sector and export orders, a survey of purchasing managers showed on Tuesday.

The manufacturing sector is hiring people at a firm pace but inflationary pressures are also rising, a Purchasing Managers Index survey revealed.

The index showed the strongest monthly rise in more than 10-and-a-half years, marketing consultants Markit said in a first estimate of their widely watched survey of purchasing managers.

"The French private sector has begun the second quarter with style, with growth accelerating at the fastest rate for more than a decade," Markit economist Paul Smith said.

"Overall expansion was led by a revived services sector which, in line with the trend noted since the beginning of the year, has shown further acceleration of growth."

The index, which is a leading indicator of how part of an economy is likely to perform, stood at 62.4 points up from 59.1 points in March and the highest level for 127 months.

For the services sector alone, the index was at 63.4 points in April from 60.4 points in March, also the highest level for 127 months.

For the manufacturing sector, the index rose to 56.9 points from 55.4 points in March, the highest for four months.

Activity by the private sector has now been on a rising trend for 21 months, the consultants noted.

The trend was being driven by new orders which in April also showed the biggest rise for 10-and-a-half years. Providers of services achieved the biggest increase in sales since September 2000.

Industrialists were benefiting from a rise of demand from abroad.

Consequently, French private companies had increased the number of people they employed for the 12th month in a row.

Employment in the manufacturing sector was therefore rising at the firmest rate since 2000.

But inflationary pressures rose in April, Markit said. Purchasing costs and sales prices remained high against a background of higher costs of raw materials.

The index is based on a survey of 750 companies in France and these preliminary findings were based on about 85 percent of the responses.

© 2011 AFP

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