Following improvements in the first two months of 2019, business conditions in France's manufacturing sector deteriorated during March.
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The marginal decline was driven by renewed contractions in output and new orders, while export sales fell at the quickest pace for three months.
Consequently, firms increased staff numbers at the slowest pace in 2019 so far, and input buying declined at the fastest rate for two-and-a-half years. Input price inflation eased to its softest since October 2016.
The headline IHS Markit France Manufacturing Purchasing Managers' Index (PMI) fell to 49.7 in March, down from 51.5 in February.
This pointed to the first deterioration in business conditions since December 2018.
French manufacturers were unable to sustain the brief recovery in production seen in February, as output fell moderately in March.
Panellists suggested that the fourth contraction in six months was largely due to falling new orders.
After a fractional recovery in the previous survey period, new business fell at the quickest pace for three months in March.
Although moderate overall, the reduction was the fourth in the past five months.
Some survey participants noted weaker demand from their clients.
A driving factor behind the fall in new work was an accelerated decline in new export business.
The solid contraction was the fastest recorded in 2019 so far and extended the current sequence of reduction to seven months.
Manufacturers suggested that weaker automotive and retail demand had contributed to lower export sales.
In line with the renewed fall in output, French manufacturers increased staff numbers only fractionally in March.
The rate of job creation eased to the slowest since the decline seen last December.
Where panellists recorded a rise in employment, some mentioned attempts to increase productivity.
Input purchasing by French manufacturers also fell in March.
Moreover, firms noted the fastest decline for two-and-a-half years, with some panellists attributing the contraction to the deterioration in new orders.
On the price front, input cost inflation eased for the fourth month in a row during March, reaching its slowest rate for nearly two-and-a-half years.
That said, the latest increase in costs burdens was still sharp overall, with panellists citing higher raw material prices.
Manufacturers expect output to be higher in 12 months' time, but the level of positive sentiment fell to a three-month low in March.
Concerns of weak underlying demand weighed on confidence. ■