PARIS (Reuters) – Manufacturing activity in France contracted in August at its fastest pace since January, as both output and new orders fell sharply, a survey showed on Monday.
The final manufacturing PMI for August came in at 43.9, down from 44.0 in July and a preliminary reading of 42.1.
The threshold of 50 separates expansion and contraction of activity.
“The situation in the French manufacturing sector is deteriorating,” says Norman Liebke, economist at Hamburg Commercial Bank.
“What appeared to be a recovery in the industrial sector in early 2024 turned out to be only a brief improvement,” he continues.
New orders declined at the fastest pace since May 2020, when activity in Europe was gripped by the COVID-19 pandemic. These orders were weighed down by lower sales both domestically and abroad. External demand weakened significantly, particularly in Europe and the Americas, contributing to the slowdown.
For the first time since January, the 12-month outlook has turned pessimistic, with political uncertainty cited as a major concern.
French manufacturers also cut jobs for the 15th consecutive month, but employment levels fell at a slightly slower pace than in July.
Despite a slight slowdown in input price inflation, manufacturers increased their selling prices at the fastest pace since March 2023. Supplier delivery times have lengthened further, partly due to ongoing disruptions to shipping in the Red Sea.
(Written by Tassilo Hummel; Claude Chendjou, edited by Kate Entringer)
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