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Further marked growth in French manufacturing sector

Staff Writer | February 4, 2017
Business conditions in the French manufacturing sector continued to improve at the start of 2017.
French worker
France   Markit France Manufacturing PMI
Growth continued to be driven by expansions in output, new orders and employment, while stocks of purchases remained broadly unchanged from the previous month.

At the same time, average supplier delivery times lengthened to a greater extent than in December.

Meanwhile, inflationary pressures persisted as evidenced by further rises in both input and output prices.

The headline Markit France Manufacturing Purchasing Managers’ Index(PMI) 53.6 in January to signal a further improvement in the overall health of the French manufacturing sector.

The index figure was up fractionally from December’s reading of 53.5 and at a 68-month high.

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.

A further expansion in output continued to underpin overall sector growth in January.

Although softening fractionally from the previous month, the rate of increase remained marked overall.

Meanwhile, the level of post-production inventories was unchanged after an eight-month sequence of decline.

In line with the trend for production, the amount of total new orders placed with French manufacturing firms increased in January, albeit at a weaker pace than seen in December.

New business from abroad also continued to rise amid reports of higher demand from the German automotive sector.

That said, the rate of expansion was the weakest in the current four-month period of growth.

French manufacturers hired additional staff members for the third successive month in January.

Moreover, the rate of job creation was the most marked since June 2011.

Anecdotal evidence suggested firms improved their operating capacity to meet higher production targets.

However, this didn’t prevent a further round of backlog accumulation.

As was the case in December, purchasing activity increased at a marked pace in January.

That said, the level of pre-production inventories remained broadly-unchanged from the previous month.