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French manufacturing shrinks at fastest rate in 15 months in Aug - PMI

Published 01/09/2014, 09:02
Updated 01/09/2014, 09:10
© Reuters French Prime Minister Manuel Valls attends a news conference at the Hotel Matignon offices in Paris

PARIS (Reuters) - French manufacturing activity shrank at the fastest pace in 15 months in August as new orders, employment and stocks of purchases all contracted more sharply, a survey showed on Monday.

Data compiler Markit said its final purchasing managers' index for the sector fell to 46.9 in August from 47.8 in July. That was slightly higher than a preliminary reading of 46.5 but left the index well below the 50-point line dividing expansions in activity from contractions.

"Sharply falling output led firms to cut back employment, purchasing and stock levels further in August," said Markit economist Jack Kennedy.

"This sort of across-the-board weakness has been a common theme in recent months and there remains very little to suggest any turnaround in fortunes will be imminent."

The weakness in the manufacturing sector adds to pressure on President Francois Hollande as he tries to revive an economy mired in stagnation and fight rampant unemployment.

© Reuters. French Prime Minister Manuel Valls attends a news conference at the Hotel Matignon offices in Paris

The preliminary PMI reading for August had shown that business activity was stagnant overall in France, with an improvement in the services sector not robust enough to fully offset the manufacturing sector's woes.

(Reporting by Ingrid Melander; Editing by Hugh Lawson)

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