France’s manufacturing sector slipped into contraction territory in March, according to a closely-watched gauge of activity.
The latest purchasing managers’ index for France’s manufacturing sector has slipped to a seven-month low of 49.6 for March, down from 50.2 in February. Any reading below 50 indicates a contraction.
However there was better news for the services sector, which returned to growth. The services PMI, a survey of activity produced by research group Markit, improved to 51.2 from 49.2 the month before and a five-month high.
Economists had been expecting a manufacturing reading of 50.2 and 49.5 for services.
Despite the weak March outcome for French manufacturers, the composite index, which combines services and manufacturing survey data, rose to a five-month high for March, of 51.1, up from 49.3 in February.
Markit economist Jack Kennedy said:
The French private sector economy ended the first quarter on a more positive note, reversing the dip in output seen during February. The latest data showed broad-based output growth across the manufacturing and service sectors, alongside strengthening optimism among service providers.
However, there were also pockets of notable weakness, such as manufacturers’ new orders and employment, which both fell. Overall, PMI data suggest a further modest rise in GDP during Q1, doing little to suggest any break from the sluggish growth pattern seen during recent times.
Today’s PMI readings are “flash” or preliminary readings.