French business booms more than expected in July on services rebound

French business activity rebounded far more than expected in July as a post-lockdown recovery in the service sector shifted up a gear, according to a survey by data compiler HIS Markit, which said its preliminary purchasing managers index jumped to 57.6 from 51.7 in June, hitting its highest level since January 2018, reported Reuters. The Purchasing Managers’ Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors.

French business activity has been recovering faster than expected since the country began emerging from a coronavirus lockdown on May 11.The government put France under one of the strictest lockdowns in Europe in mid-March, shutting down vast swaths of the euro zone’s second-biggest economy and plunging the country into its worst recession since modern records began in 1948. Companies in both the services and manufacturing sectors both ramped up production in July as backlogs built in the face of pent-up demand unsatisfied during the lockdown.

While France’s economy has been recovering more quickly than expected, Finance Minister Bruno Le Maire said that economic data were still too fragile to revise his forecast for an economic contraction of 11% this year.