French services activity growth strongest in over 4 years in April -PMI

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May 4 (Reuters) – France’s dominant services sector enjoyed its sharpest increase in activity in more than four years in April as fewer COVID-19 restrictions gave businesses a boost, although inflation remained a concern, a survey showed on Wednesday.

S&P Global said its final services Purchasing Managers’ Index (PMI) was 58.9 points last month, up from 57.4 in March and broadly in line with a flash estimate.

Any reading above the 50 point mark indicates growth. The final services PMI number in April was the highest in any month since January 2018.

A final April reading of France’s composite PMI index, which includes both the services and manufacturing sectors, meanwhile rose to 57.6 points from 56.3 in March, broadly in line with an earlier flash forecast.

“It was another positive month for France’s services firms in April as business activity in the largest sector of the economy increased at the fastest rate in over four years,” said S&P Global senior economist Joe Hayes.

“The economy is still reaping the benefit of reduced COVID-19 restrictions as many companies linked strong and sustained growth in their order books to the pandemic recovery.”

Rising prices were an issue, though, Hayes added.

Data last week showed French inflation jumped to a record high in April, reaching an annual rate of 5.4% as energy prices surged. 

“Rising prices also pose a risk to the outlook for the sector. Output charges rose at the fastest rate on record in April, and some panellists were concerned about the impact of rising inflation on activity levels,” said Hayes.

(Reporting by Sudip Kar-Gupta; Editing by Catherine Evans)

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