France Manufacturing PMI falls to a four-month low

FXStreet (London) - French manufacturers reported worsening operating conditions at the end of 2014 according to the December manufacturing PMI.

The headline Markit France Manufacturing Purchasing Managers’ Index posted 47.5 in December, down from 48.4 in November. The latest reading signalled the sharpest deterioration in overall manufacturing sector operating conditions since August.

According to Markit, output at French manufacturers fell for the seventh month running during December. The rate of contraction was solid, having accelerated to the sharpest since July. Lower production reflected a further decrease in new orders. New work fell at a similar solid pace to that seen in November, with Markit survey respondents commenting on fragile demand conditions and a wait-and-see attitude among clients. New export orders decreased further, with the latest fall more marked than that observed one month previously.

Jack Kennedy, Senior Economist at Markit which compiles the France Manufacturing PMI survey, said: “The French manufacturing sector ended 2014 on a weak note, with output and employment both falling at sharper rates in December. Falling global commodity prices should at least give manufacturers room to accommodate further output price cuts as they attempt to shore up market share amid intense competitive pressures. Yet moribund demand continues to weigh heavily on the sector and, with the battle over the government’s proposed economic reforms only just beginning, a turnaround remains unlikely any time soon.”