Despite floods and industrial unrest, France has seen a pick-up in services, offsetting weakness in manufacturing. Grace Pascoe looks at the latest PMIs and reports on the outlook for the rest of the euro zone.
French flood waters have hit a 30 year high. Bursting the Seine's banks, Forcing the closure of museums and public transport. Recent industrial action has also wreaked havoc in the country. But the economy seems to be rising above it all. (SOUNDBITE) (English) JPMORGAN, MARKET ANALYST, NANDINI RAMAKRISHAN, SAYING: "You have seen actually in recent data investment ticking up a bit in France so that industrial unrest as well as these floods causing near term weakness or blips in the data shouldn't affect our long term view on a strong or stronger French economy. Now I would caveat this by saying reforms are key for the euro zone and particularly France to move forward." A six-month high in French services for May Lifted it's overall PMI index up to 50.9 from 50.2. The euro zone bloc as a whole also picked up If only slightly, coming in at 53.1 for May. (SOUNDBITE) (English) JPMORGAN, MARKET ANALYST, NANDINI RAMAKRISHAN, SAYING: "The outlook for euro zone growth is in that one to two percent range. We are thinking about 1.4 percent GDP growth. The PMIs that are continuously stronger in services and composite do indicate that stronger momentum in the services side... Overall the entire region is diverse enough to propel forward on this... range for the rest of this year and the next few." As well as France, Germany proved a glimmer of optimism, up 0.9. Spain and Ireland remained resilient. Whilst Italy slumped to near stagnation, falling below 50 for the first time since 2014.