PARIS (Reuters – France’s service sector grew at the fastest rate since July, as more demand conditions improved. Employment growth also reached a 20 year high, according to a weekly survey.

IHS Markit data compiler said the Purchasing Managers’ Indice (PMI), which measures the nation’s dominant service sector, rose to 56.6 from 56.2 in September. It was consistent with an initial forecast of 56.6.

A composite PMI index that includes both the manufacturing and services sectors fell to 54.7 in October, from 55.3 in September. This was due partly to supply-chain problems caused by COVID-19 strict controls, which has affected port operations.

This PMI came in line with the initial 54.7 estimate.

PMIs were above 50 points, which is the threshold that separates an expansion from contraction. However, Joe Hayes, senior economist at IHS Markit warned that supply problems were making the recovery more disjointed.

Hayes stated that “services output continues to rise at an incredibly rapid rate according to historical standards, as activity levels in the economy return back to pre-pandemic levels.” Hayes stated that demand conditions remain strong and that firms are increasing their staffing.

He said, “But, we can’t ignore what is happening in the manufacturing sector.”