As PMI shows, the activity of the French private sector unexpectedly declines in May

PARIS (Reuters) – France’s private sector unexpectedly contracted in May after expanding in April, with its dominant services sector joining the manufacturing sector in reporting a decline in activity, a preliminary survey showed on Thursday.

S&P Global’s HCOB Flash Shopping Managers’ Index for the services sector fell to 49.4 from 51.3 a month earlier, well below the forecast of 51.6 in the Reuters poll.

Any number below 50 indicates a decline, and anything above 50 indicates an increase in activity.

The flash manufacturing PMI rose to 46.7 points, better than the Reuters poll forecast of 45.8 and above April’s final manufacturing PMI of 45.3.

The flash composite PMI, covering the two main sectors, fell to 49.1 points from 50.5 in April and was worse than the Reuters poll’s forecast of 50.9.

“The French economy will grow in the second quarter thanks to strong domestic demand (…) the French services sector is showing signs of a sustained growth trend (…) the French manufacturing sector is slowly making a comeback,” said Hamburg Commercial Banking economist Norman Liebke.

The French economy, the second largest in the euro zone, is expected to grow slightly in the second quarter after growing 0.2% in the first quarter, the country’s central bank said in its latest monthly economic survey.

(Reporting by Dominique Vidalon; Editing by Hugh Lawson)