France's factory output is falling again

Peter Spence
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French factory activity has begun to fall (Source: Getty)

The French economy remains stuck in a rut. Its manufacturing sector has started shrinking again, according to new survey data compiled by Markit.

Their purchasing managers' index figures for the sector show a fall from 51.2 to 49.6 in May. Any number below 50 implies a contraction in activity.

Analysts had expected a worse result this month, forecasting a fall to 49.3, so this is a small beat.

Markit's respondents pointed to a further lengthening in suppliers' delivering times, with some panellists reporting on low stock levels at vendors' units. The data release also showed that French employment in the sector had fallen at its fastest rate since February.

Jack Kennedy, senior economist at Markit, says that "faltering new orders scuttled the French manufacturing sector in May, with the PMI sinking below the neutral 50 mark for the first time in three months."