French factory activity slows to weakest reading in a year despite price cuts: PMI

[PARIS] French manufacturing activity slowed in April to its slowest pace in a year as demand weakened, even though companies cut prices the most since the financial crisis, a survey showed on Monday.

The French Purchasing Managers' Index fell to 48.0 in April from 49.6 in March, data compiler Markit said its final report. That was slightly lower than a preliminary reading of 48.3 and brought the index further below the 50-point line that divides expansion in activity from contraction.

Activity slowed as the flow of new orders fell for the fourth month in a row. Demand from abroad was the weakest since March 2013.

"This was despite output prices being cut at the steepest rate since mid-2009, highlighting the sector's struggles in the face of persistently weak demand," Markit senior economist Jack Kennedy said.

"Manufacturers responded with another round of job shedding and a further cut in purchasing of inputs," he added.

Despite ongoing weakness among long-suffering manufacturers, official GDP data on Friday showed that they ramped up investment in the first quarter at the fastest pace since mid 2006, to take advantage of a limited-time tax write-off for investment in productive assets.

REUTERS