France services PMI inch higher in July despite worries over Brexit, global headwinds

Services sector in France during the month of July inched higher, rising above the 50-point mark despite ongoing worries over Brexit amid turbulence caused by ongoing global headwinds.

The preliminary Purchasing Managers’ Index (PMI) for the manufacturing and service sectors rose to 50.0 from 49.6 in June, beating the 50-point mark that separates expansion from contraction, data released by Markit showed Friday, confounding a Reuters poll forecast for a slight drop to 49.2.

"In the face of the terrorist attack and the Brexit vote, to have the index coming up to 50.0 in a stable economy is perhaps a good result," said Chris Williamson, Chief Economist, Markit.

The resilience came largely from the service sector, where the index rose to a better-than-expected 50.3 from 49.9 in June as the flow of new business improved and firms increased headcount. The index for manufacturing remained in contraction territory, although it improved to a four-month high of 48.6 from 48.3 in June instead of the deterioration expected by economists polled by Reuters.

Meanwhile, the rise in overseas new orders for the first time in seven months might result in a weaker euro or that French businesses might be picking up some trade from their British competitors after the Brexit referendum in June.