French manufacturing activity stagnates in February

[PARIS] French manufacturing activity stagnated in February as the sector struggles to mount a convincing recovery in the face of weak demand, a survey showed on Tuesday.

Data compiler Markit said its final Purchasing Managers' Index (PMI) rose to 50.2 in February from 50 in January. That was marginally lower than a preliminary reading of 50.3, but kept the index above the 50-point line dividing expansions in activity from contractions.

Some managers surveyed by Markit reported subdued demand and budget restrictions at clients while the flow of new orders continued to ease for the second month in a row.

"Falling new orders were again the source of weakness, leading firms to cut production levels slightly," Markit economist Jack Kennedy said.

"Meanwhile, the survey's price indices point to continued downward pressure on already low inflation," he added.

That will offer little comfort to the European Central Bank as it reviews the euro zone's inflation outlook ahead of a Governing Council meeting next week where it is expected to step up its efforts to revive price growth.

REUTERS