Sluggish France hits Eurozone’s recovery hopes

 
Tim Wallace
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ECONOMIES across the Eurozone are beginning to recover, but the sustained slump in France is weighing on that emerging growth, influential surveys showed yesterday.

Businesses through the currency area as a whole reported activity picking up – Markit’s purchasing managers’ index (PMI) picked up from 52.8 in June to hit 54 in July.

Any score of above 50 indicates growth, and the Eurozone services sector’s score of 54.4 represents the fastest expansion in 38 months.

Germany is leading the way – overall its businesses reported a score of 55.9, a three-month high.

But activity in its neighbour France is contracting.

France’s PMI came in at 49.4, up from 48.1 in June, indicating it is contracting at a slower pace. The more detailed indices showed an even gloomier picture, with employment falling for the ninth consecutive month.

“The French private sector economy remained in reverse gear in July, dragged down by weakness in the manufacturing industry which offset a small improvement in services,” said Markit economist Jack Kennedy.

“PMI data remain consistent with quarterly GDP close to stagnation levels, as the economy continues to show little sign of turning around its recent sluggish performance.”

By contrast, businesses in Europe’s troubled periphery are growing at their fastest pace since 2007, indicating the countries may at last be bouncing back from the financial crisis.

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