By Vicky Buffery
PARIS, June 23 (Reuters) - The downturn in French private sector activity eased for the fourth straight month in June, helped by much slower falls in the level of new orders, a survey of purchasing managers showed on Tuesday.
A flash estimate of the Markit/CDAF composite purchasing managers' index (PMI) -- which combines data from firms in the services and manufacturing sectors -- rose to 47.7 in June compared with 46.6 the previous month.
At less than 50, the index still indicates that France's private sector is contracting, but June's reading was the highest in 12 months, bolstering the view that France is moving closer to recovery.
Key to the improvement was a sharp jump in the composite new orders index, which hit 48.3 compared to May's reading of 45.3, signalling that demand in the euro zone's second largest economy is no longer in freefall.
"The composite new orders index is getting close to stabilisation. We're still very much on course for a strong easing and it does suggest that by the end of the year we could be seeing growth again in France," said Chris Williamson, chief economist at Markit.
"Among the big euro zone economies, (France) is certainly looking the healthiest in terms of its recovery track," he added.
In France's manufacturing sector, June's flash estimate for the ratio of new orders to inventories rose to 1.12, a level it last reached in November 2007, making it increasingly likely that firms will need to raise production in the months ahead.
At the same time, the manufacturing PMI for June rose to 45.5 from 43.3 the previous month, reflecting the slowest pace of contraction in activity since August last year.
However, Markit cautioned against taking an overly optimistic view of the data, stressing that conditions in the French economy remain fragile, and recovery is likely to be unstable.
In the services sector, June's flash PMI slipped back to 47.5 from 48.3 in May, after three consecutive monthly rises.
The reading came in below consensus forecasts which were for a figure of 49.0.
"This is a timely warning shot that we can't expect any swift recovery to normal here," Williamson said.
"There are huge problems facing the economies in the euro area - this is a clear reminder that much work still needs to be done in terms of getting the economies back to any reasonable growth pattern." (Editing by Stephen Nisbet)