PARIS (FRANCE) – As the unwinding of a nationwide lockdown releases a wave of pent-up demand and sets the stage for an economic rebound, French business activity surged past expectations in May.
The reports were given by a survey. From Wednesday, non-essential retail outlets have been able to reopen to customers for the first time in six weeks as France gradually phases out its third coronavirus lockdown in little more than a year.
Data compiler IHS Markit said its composite Purchasing Managers’ Index (PMI) jumped to 57.0 points in a preliminary reading, up from 51.6 last month to hit its highest since July.
The reading blew past economists’ expectations in a Reuters poll for 53.7 and pegged the index well above the 50-point threshold that demarcates an expansion in activity from a contraction.
A semblance of pre-pandemic normality returned to French streets on Wednesday as people braved unpleasant weather in much of the country to gather on outdoor terraces of cafes and restaurants, which had been closed since November.
The service sector, which has been hit hardest by COVID-19 measures, saw a particularly strong resurgence, with its flash PMI jumping to 56.6 from 50.3 in April, well ahead of expectations for a reading of 53.0.
The flash PMI for manufacturing rose to 59.2 – just shy of a 20-year high – from 58.9 in April, exceeding economists’ forecasts for a dip to 58.5.
“The service sector drove the overall acceleration in growth during May, both in terms of output and new orders, although manufacturing continued to register comparatively faster rates of expansion,” IHS Markit’s Trevor Balchin said.
“Manufacturers remained hindered, however, by ongoing supply shortages and delays, with average lead times lengthening at one of the most marked rates in the survey history,” he added.