April 1, 2014 / 8:16 AM / 4 years ago

French manufacturing expands in March at fastest rate since June 2011 -PMI

PARIS (Reuters) - France’s long-declining manufacturing sector returned to growth last month even more strongly than initially thought, a survey showed on Tuesday, suggesting a gradual recovery is taking hold in the euro zone’s second-biggest economy.

Coils of steel are seen at the ArcelorMittal Factory in Florange, Eastern France, October 18, 2013. REUTERS/Vincent Kessler

Data compiler Markit said its final manufacturing purchasing managers’ index rose to 52.1 in March from 49.7 in February, reaching its highest level since June 2011.

That topped a preliminary reading of 51.9 and brought the index above the 50-point line dividing expansions in activity from contractions for the first time since February 2012.

“The French manufacturing sector delivered a much improved performance in March, buoyed by solid growth of new orders,” Markit senior economist Jack Kennedy said.

“With the sector having finally moved into expansion territory following a prolonged spell of weakness, firms will be looking for signs of a convincing recovery taking hold before looking to boost areas such as employment,” he added.

The flow of new orders grew at the fastest pace since May 2011, boosting production and causing backlogs to grow for the first time in eight months, the survey found.

Employment at manufacturing firms improved marginally, ending two years of job shedding, Markit said. Firms also cut their selling prices in the face of tougher competition, which could put pressure on already strained margins.

The improvement in the manufacturing sector offers rare good news for President Francois Hollande as he seeks to live up to promises to turn around the economy and bring down unemployment.

- Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence.

To subscribe to the full data, click on the link below: www.markit.com/Contact-Us

For further information, please phone Markit on +44 20 7260 2454 or email economics@markit.com

Reporting by Leigh Thomas; Editing by Hugh Lawson

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