PARIS, Aug 1 (Reuters) - French manufacturing activity contracted in July, a monthly survey showed on Thursday, as firms suffered their sharpest fall in output for three months, in a further sign of weakness in the euro zone’s second biggest economy.
Data compiler IHS Markit said its final purchasing managers index fell to 49.7 points in July from 51.9 in June. A reading below 50 points marks a contraction.
IHS Markit said there had been a drop in new orders placed with French manufacturing companies, and a slowdown in the automotive sector, impacted by a trade dispute between the United States and China.
Data this week showed French economic growth slowed down slightly in the second quarter as consumer spending eased and companies drew down inventories.
“The latest PMI data showed a renewed deterioration in business conditions faced by French goods producers, which comes as a disappointment after the recovery in June,” said IHS Markit economist Eliot Kerr.
“The manufacturing sector continues to be the weak point in French economy, with both output and new orders falling at the start of the third quarter.”
Reporting by Sudip Kar-Guptasudip.firstname.lastname@example.org