France’s services sector grew in July thanks to Olympics, PMI shows

By Sudip Kar-Gupta

PARIS (Reuters) – France’s dominant services sector grew in July, helped by an economic recovery following the Olympic Games, although the country’s manufacturing sector weakened further, a survey showed on Wednesday.

S&P Global’s flash HCOB purchasing managers’ index for the services sector rose to 50.7 in July from 49.6 in June, beating a Reuters forecast of 49.8.

Any value above 50 points indicates an increase in activity, while a value below 50 indicates a recession.

Meanwhile, the preliminary PMI for the French manufacturing sector in July fell to 44.1 points from 45.4 in June – a result lower than the forecast of 45.8 points.

The preliminary PMI for July, which covers both the services and manufacturing sectors, came in at 49.5, up from 48.8 in June and beating Reuters’ forecast of 49.0.

Hamburg Commercial Bank economist Norman Liebke said the Olympic Games – which took place in Paris from July 26 to August 11 – had boosted the services sector.

“The Olympic Games are boosting the French economy. For the first time in three months, business activity among French service providers has increased. Anecdotal evidence suggests that this is partly due to the Olympic Games,” Liebke said.

“The French economy appears to be on track to recover in the second half of the year, with the recovery expected to be driven by the services sector, but both input and output prices remain a challenge for the French economy due to the acceleration in inflation,” he added.

(Reporting by Sudip Kar-Gupta; Editing by Christina Fincher)