France's economy began rebounding after May marked the end of a decline that had lasted since March. June was a continuation of that trend, according to the IHS Markit purchasing managers' index for the nation.
The reading of 55.6 constituted a 1.4 increase from May's figure. Despite the French manufacturing industry slowing down its pace of growth during this period, major expansion in the services sector was enough to drive the overall index to a two-month high. It also came in ahead of expectations from a median survey of economists conducted by Bloomberg, which had projected no change in the IHS index. Employment increases in this field rose to the highest level seen in four months.
There are, however, a few indications of some potential difficulties on the horizon for the world's sixth-largest economy (and second largest in the European Union), though some are beyond the control of French government or business leaders. For one, Bloomberg reported that the European Central Bank recently let eurozone countries know it won't allow more bond purchases during 2018, which could limit some opportunities for France.
Additionally, domestic and foreign factors threaten to impugn French economic expansion. These risks include slow-growing household consumption, increasing oil prices, potential trade disputes with the U.S. and expected tensions between France and Italy.