French
business activity retreated again in May despite a slight improvement
in manufacturing, a survey showed on Thursday, offering little hope
of a quick exit from recession in the euro zone's second-biggest
economy.
Data
compiler Markit said its preliminary composite purchasing managers
index, covering activity in the services and manufacturing sectors,
was unchanged in May at 44.3, far below the 50-point line dividing
expansions in activity from contractions.
Markit
chief economist Chris Williamson said business activity remained far
too subdued to declare the end of the downturn in sight.
"There
is just a lack of belief that the situation is going to improve any
time soon," he added. "There is strong dissatisfaction with
the government and its handling of the economy."
The
survey showed a slower rate of decline in the manufacturing sector,
which saw its reading rise to a nine-month high of 45.5 from 44.4 in
April, also beating economists' average expectations for 44.8.
The
larger services sector, which accounts for more than half of French
economic activity, saw its index remain unchanged at 44.3, falling
slightly short of expectations for 44.5.
In
one positive sign, the flow of overall new business improved slightly
in May thanks mainly to a slower rate of decline in manufacturing new
orders.
France
entered recession in the first three months of the year, posting two
consecutive quarters of contraction in economic output.
The
2 trillion euro economy has struggled as business and household
confidence have crumbled in the face of record jobless claims and
rising taxes.
Williamson
said the May PMI figures suggested the economy would contract at a
rate of 0.5 percent in the second quarter, though he said the PMI
data have painted a gloomier picture than GDP figures recently.
The
government is hoping the economy will grow 0.1 percent this year,
though even President Francois Hollande has acknowledged that the
country would be lucky to achieve that.
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