World News

French business growth slows in January in wake of strikes: PMIs

PARIS (Reuters) – French business activity expanded at a weaker pace in January than in December, a survey showed on Friday, as nationwide strikes weighed on the euro zone’s second-biggest economy.

Data compiler IHS Markit said its composite flash purchasing managers’ index (PMI) slipped to 51.5 points in January from 52.0 in December, marking a four-month low. Analysts polled by Reuters had forecast a reading of 52.0 for January.

The January reading for the dominant services sector fell to 51.7 points from 52.4 in December, reaching a four-month low, while the manufacturing PMI rose to 51.0 points from 50.4 in December.

The PMI readings remained above the 50-point level demarcating expansions in activity from contractions.

“While there were warnings of softer conditions in the service sector, linked to national railway strikes, manufacturing displayed mild signs of revival,” said IHS Markit’s principal economist Pollyanna De Lima.

“Encouragingly companies across both sectors are in buoyant mood regarding the year-ahead outlook for business activity, with optimism at a nine-month high. These upbeat growth projections continued to drive job creation and should ensure the private sector stays in expansion territory in the near-term,” added De Lima.

French trade unions have led a wave of nationwide strikes since December, in protest at plans by President Emmanuel Macron to simplify and streamline the country’s pension system.

(Reporting by Sudip Kar-Gupta, Editing by Leigh Thomas)