French manufacturing data sends mixed signals
By Lucile Malandain, AFPPARIS -- Manufacturing activity in France faltered in August and sales of new cars slumped, data showed on Monday, clouding recovery of the economy from recession in the second quarter.
September 3, 2013, 4:59 pm TWN
However the latest data also showed signs that the underlying climate, notably in the critically important area of export orders, may be steadying.
The purchasing managers' index of activity in the manufacturing sector had rallied in July to give a reading of 49.7, but this was also the reading for August in the latest figures on Monday.
This means that the index, the result of a survey by the Markit company, has stabilized below the point of 50, which indicates expansion of contraction in the sector.
Official growth data on Aug. 14 showed that the French economy grew by 0.5 percent in the second quarter, showing unexpectedly firm recovery from a shallow recession.
But analysts warned that this had been driven largely by unseasonal spending on energy during an exceptionally long winter, and that the trend might not last.
The left-wing government, under strong pressures over weak growth and competitiveness, high unemployment, excessive public deficit and high taxes, scrutinizes each new set of data to see if the signs bear out its forecasts that recovery is on the doorstep.
The quarterly growth figure led the official statistics institute to upgrade its outlook for the year to growth of 0.1 percent, in line with the government's estimate, instead of minus 0.1 percent.
However, French President Francois Hollande, who has assured that the upward trend of unemployment will be inversed by the end of the year, said at the end of last week that in view of the growth data, the government might upgrade slightly its forecast for growth in 2013.