French weakness hits eurozone recovery

The eurozone's recovery slowed a little this month amid further signs of weaknesses in France's economy.

The flash purchasing managers' index, a closely watched poll compiled by data company Markit, fell to 53.5 from 54 in March. While the figure remains above the 50 level that marks an expansion in activity, the reading is the weakest for two months.

A separate reading for France fell from 51.5 to 50.2, dashing hopes that the region's second-largest economy had shrugged off last year's dismal economic performance and was starting to grow at a faster pace. Ken Wattret, economist at BNP Paribas, described the French reading as "very disappointing". New orders for French manufacturers fell at a strong pace, suggesting that industrial output would remain disappointing in the months ahead despite the weaker euro.

The index for Germany, the region's largest economy, fell from 55.4 to 54.2. While the cheaper euro helped secure new business for German companies, a slowdown in demand for some of the country's exporters' most important markets damped the impact of the currency's depreciation on trade.

The cheaper euro, low oil prices and the European Central Bank's pledge to buy €1.1tn of mostly government bonds between now and September 2016 under its quantitative easing programme have boosted hopes that 2015 will finally see meaningful economic growth in a region that has suffered from years of crisis and stagnation.

After months of positive news, Markit's chief economist Chris Williamson said it was too early to draw firm conclusions about whether growth was faltering. But the poor performance of France was more concerning and appeared to reflect "a longer-term malaise which, after a promising start to the year, in fact shows few signs of lifting."

There were also signs that businesses and customers were becoming risk averse, linked in some cases to the rising possibility of a default by Greece.

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