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Economy

French private-sector growth at its highest since June 2011

media Optimistic perspectives for French economic growth according the PMI flash index published by Markit. REUTERS/Kai Pfaffenbach

Private-sector growth in France strengthened in June for the fifth consecutive month, hitting its highest levels since August 2011 at 53.4 points, up from 52 in May. This marks France's fastest growth for 46 months as services accelerate and industry grows for the first time in one year.

The PMI flash index observed growth in June focused on the service sector, whose activity registered strong strides at 54.1 points compared to 52.8 points the previous month.

Dossier: Eurozone in crisis

The activity on the index is calculated by a survey of company purchasing managers and is based on 85 per cent of responses at this stage.

Manufacturing industry production remains stable at 50.5 points in June from 49.4 points in May. The result marks the end of a 12 month contraction of manufacturing production, notes Markit in its statement

The composite index also rose to 53.4 points in June compared to 52.0 in May, rising for the fifth consecutive month and hitting its highest level since August 2011.

"French economic growth continues to reinforce itself in June, supported by better performance in the service sector and a stabilisation of conditions in the manufacturing industry," said Jack Kennedy, a Markit economist quoted in the statement.

"The last PMI flash numbers bode well for the growth at the second quarter, after a 0.6 per cent increase in GDP registered at the beginning of the year."

The confidence of service providers about their volumes of activity reached their highest levels for 39 months in June, remarked Markit. Survey responders noted the improvement of economic conditions, steadying demand and development projects in their businesses.

"Testifying to the growing optimism of French businesses about a durable economic recovery, the perspectives of activities of service providers have risen up and reached their highest levels for more than three years," explained Kennedy.

The volume of global orders folows June growth for the seventh consecutive month.

Employment also rises in June for the fourth consecutive month at a "relatively stable" growth rate thanks to the service sector. Trends diverge, however, between the two sectors: if service providers augment their workforce, manufacturers continue to cut jobs.

France's growth reflects Markit's PMI flash results for eurozone growth despite uncertainty with the Greek crisis. Private-sector growth in the eurozone has reached its highest levels in four years this June.

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