French private sector activity unexpectedly contracts in May, PMI shows

PARIS (Reuters) - France's private sector unexpectedly shrank in May after expanding in April, with the dominant services industry joining manufacturing in reporting a contraction in activity, a preliminary survey showed on Thursday.

The HCOB flash purchasing managers index for the services sector, compiled by S&P Global, fell to 49.4 from 51.3 the month before, well below the 51.6 forecast in a Reuters poll.

Any figure below 50 marks a contraction, while above 50 shows an expansion in activity.

The flash manufacturing PMI rose to 46.7 points, better than a Reuters poll forecast for 45.8 and above April's final manufacturing PMI of 45.3.

The flash composite PMI, which comprises the two main sectors, fell to 49.1 points from 50.5 in April, and worse than a Reuters poll forecast for 50.9.

"The French economy will grow in the second quarter thanks to strong domestic demand (...) the French services sector is showing signs of a sustainable upward trend (...) France's manufacturing sector is slowly making a comeback," said Hamburg Commercial Bank economist Norman Liebke.

The French economy, the second largest in the euro zone, is set to expand slightly in the second quarter after growing 0.2% in the first quarter, the country's central bank said in its latest monthly business survey.

(Reporting by Dominique Vidalon; Editing by Hugh Lawson)

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