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Manufacturing sector growth in France sharpest since September 2000

Staff Writer |
The French manufacturing sector ended 2017 on a solid footing.

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New order growth hit a seven-year high, which in turn encouraged firms to hire additional workers and expand their output, each increasing to the greatest extent since the second half of 2000.[break]

Nevertheless, backlogs of work accumulated to the sharpest degree in over 11 years, contributing to the highest degree of business confidence since the series’ inception fiveand-a-half years ago.

On the price front, inflationary pressures eased somewhat, but remained marked nonetheless.

The PMI is a composite single-figure indicator of manufacturing performance.

It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.

Any figure greater than 50.0 indicates overall improvement of the sector, while any reading below 50.0 indicates overall deterioration.

The IHS Markit France Manufacturing Purchasing Managers’ Index (PMI) posted 58.8 in December to highlight a further improvement in the overall health of the French manufacturing sector.

Up from 57.7 in November, the index signalled the sharpest improvement in business conditions since September 2000.

Growth was evident across each of the three monitored subsectors, led by investment goods.

The overall improvement continued to be driven by improving client demand.

Indeed, the latest data highlighted the sharpest rise in new orders since November 2010.

Responding to higher new order volumes, firms hired additional staff members and at the fastest pace in over 17 years.

Nevertheless, backlogs of unfinished work continued to rise as new order growth outstripped enhancements to operating capacity.

Moreover, the rate of accumulation in outstanding business was the most marked since November 2006.

Another marked expansion in output was recorded.

Indeed, in line with the trend for employment, the rate of growth was the most marked since the second half of 2000.

Higher production fed through to a fourth successive rise in post-production inventories.

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