French factory activity slows further in February: PMI

[PARIS] A downturn in France's manufacturing sector worsened in January, a survey showed on Monday, as a sharp decrease in new orders and sluggish demand fuelled more job-cutting.

Data compiler Markit's final purchasing managers' index, which includes the services and manufacturing sectors, fell to 47.6 in February from 49.2 in January.

That was slightly lower than a preliminary reading of 47.7 and brought the index further below the 50-point line dividing expansions in activity from contraction.

"The French manufacturing sector remained in a funk during February, with output and new orders falling at sharper rates," said Markit senior economist Jack Kennedy.

The weak demand environment has increased the risks of deflation, and firms have responded by cutting jobs further and reducing their pre- and post-production stocks, he said.

The fall in new orders was the sharpest since August, Markit said, reflecting lacklustre demand. New export orders were down for the 10th month in a row, it added.

For the 11th straight month, employment in the manufacturing sector fell, with the rate of job shedding slightly more pronounced than in January, Markit said.

REUTERS