French central bank revises growth forecast higher despite heatwave disruption

PARIS, July 9 (Reuters) - French economic growth strengthened in the second quarter as activity increased in June across industry and rebounded in services and construction, the Bank of France said on Thursday, revising its outlook up.

After a weak month in May marked by several public holidays, firms largely managed to sustain activity in June despite a record heatwave late in the month by changing working hours to avoid the hottest parts of the day. 

While the extreme temperatures slowed some construction projects and prompted changes to factory schedules, businesses generally avoided significant disruptions, the central bank said.

Some in the service sector managed to benefit from the heatwave, with hotel demand boosted by customers seeking air-conditioned rooms. Orders for cooling systems also increased.

The euro zone's second-biggest economy likely grew 0.2% in the second quarter after contracting 0.1% in the previous three months, the Bank of France said, revising its estimate up from a flat reading previously.

The upgrade was based mainly on services, including stronger consumer services, information and communication, hospitality and transport. Manufacturing was also a source of support, but construction was expected to decline again over the quarter, the bank said.

The central bank's monthly business sentiment survey of 8,500 firms found activity strengthened in industry in June and rebounded in services and construction. 

Orders in manufacturing were overall around normal levels and an uncertainty indicator eased back to its level before the Iran war began at the end of February.

Companies cited international tensions and input costs as concerns, although supply chain difficulties and pressure from raw material and energy prices have eased compared with peaks earlier this year.

Business leaders expect activity to continue growing in July versus June, albeit at a more moderate pace in industry and services and only slightly in construction.

(Reporting by Leigh Thomas; editing by Barbara Lewis)