European businesses reckon things are getting better — except in France, where political turmoil continues to sting economically.
The preliminary readings of the purchasing managers indices — a closely watched gauge of business conditions — showed the perception of both services and manufacturing improving across the eurozone, with services leading the way.
The main outlier to the new data was France, which saw a decline in the headline figure to its lowest level since February. Services also declined and even an apparent pickup in manufacturing “masked declines in output,” HSBC Eurozone Economist Chris Hare said in a note.
The country has been roiled by political infighting since snap elections were called last year, leading to parliamentary deadlock that has hampered efforts at financial reform and increased borrowing costs.
Elsewhere, things were a little rosier. Across the bloc, services rose to 52.6 from 51.3, hitting a 14-month high, while manufacturing improved moderately, according to the eurozone PMI. The composite measure, a combination of both, rose to 52.2 from 51.2, the fifth increase in as many months.
The picture was positive even for recent stragglers like Germany, which also experienced a boost led by services, although manufacturing remained contractionary.
“France is increasingly becoming an outlier in the PMI survey, with drawn-out political uncertainty relating to budget negotiations appearing to have a dampening effect on sentiment,” said Hare.
However, he added that a recent business confidence survey by INSEE had suggested a more positive outlook for the country.
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