[PARIS] French manufacturing activity shrank in July, as a long-awaited economic recovery struggles to take root in the face of limp demand, a survey showed on Monday.
Data compiler Markit said its final reading of its monthly purchasing managers index for the sector fell to 49.6, down from 50.7 in June, which was the best level in 14 months.
The July reading, which was unchanged from a preliminary estimate, brought the index back below the 50-point threshold dividing expansions in activity from contractions. "Key variables such as output, new orders, employment and stock levels all showed declines, as weak demand continued to hold back the performance of the industry and thwart any sort of upturn taking hold," Markit senior economist Jack Kennedy said.
The flow of new orders, an indicator of future business activity, contracted at the fastest rate since April while firms cut staff levels for the 16th month in a row, Markit said.