PARIS: French business activity stabilised this month as the dominant service sector unexpectedly returned to growth, helping to offset weakness in manufacturing, a monthly poll showed on Thursday.
Data compiler IHS Markit said that its composite purchasing managers' index (PMI) rose to 50.0 from 48.9 last month, slightly better than economists' average forecast for 49.7 in a Reuters poll.
A reading above 50 indicates that activity is in expansion while anything beneath it signifies a contraction.
"France stagnated, which is obviously a disappointment but it is better than the decline we saw in March," IHS Markit chief business economist Chris Williamson told Reuters.
The flow of new orders declined for the fifth month in a row, albeit at a slower pace than in March, while firms stepped up the pacing of hiring as expectations for future output rose to their highest since September.
A breakdown showed that in the service sector PMI rose to a five-month high of 50.5 from 49.1 last month, beating expectations in a Reuters' poll for a reading of 49.8.
In manufacturing, the index eased marginally to 49.6 - the lowest since August 2016 - from 49.7, missing expectations for an average reading of 50.0.
Business confidence has struggled to regain momentum lost after a series of anti-government protests at the end of last year which saw some of the worst street violence in decades in the capital.
"There is very little evidence of a pick-up in growth after the protests that hit the economy at the turn of the year, so a very disappointing signal there, although there are some tentative signs business expectations have picked up," Williamson said.
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