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French manufacturing grows at weaker pace in February

French manufacturing
France   Markit France Manufacturing PMI

Manufacturing companies in France reported a further improvement in operating conditions during February, buoyed by a sharp and accelerated pace of expansion in output.

However, the rate of new business growth eased from the previous month in both foreign and domestic markets to suggest a weakening underlying demand trend.

Employment and purchasing activity also rose to a lesser extent than in January.

Meanwhile, strong cost push inflation pressures persisted and contributed to another rise in average selling prices.

The PMI is a composite single-figure indicator of manufacturing performance.

It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.

Any figure greater than 50.0 indicates overall improvement of the sector, while any reading below 50.0 indicates overall deterioration.

The Markit France Manufacturing Purchasing Managers’ Index (PMI ) posted 52.2 in February to signal another improvement in the overall health of the French manufacturing sector.

The index was down from January’s reading of 53.6 and hit a three-month low.

Contrary to a weaker overall expansion, firms raised production at a quicker pace in February.

The rate of expansion was the sharpest since May 2011.

However, this did not prevent a fall in postproduction inventory levels, albeit at a fractional pace.

French manufacturing companies recorded a fifth consecutive rise in incoming new work in February amid some reports of greater demand from the automotive sector.

However, the rate of increase eased for the second successive month and was marginal overall.

New export orders followed a similar trend, increasing at a softer pace than in January.

Employment in the French manufacturing sector rose for the fourth consecutive month during February.

That said, the rate of job creation eased to a three-month low.

Concurrently, backlogs of work continued to accumulate.

Firms raised their purchasing activity for the fifth time in as many months in February.

However, the rate of growth was weaker than seen in the previous period amid waning client demand.

In contrast, the level of pre-production inventories declined for the first time since last October.


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