France Manufacturing PMI March 2008

French manufacturing expanded at its slowest pace in five months in March as growth in output and new orders weakened. The NTC/CDAF Purchasing Managers' Index, which measures the health of French manufacturing, fell to 51.9 -- slightly below the 52.0 both predicted by economists last week and given in a flash estimate 12 days ago -- from 53.8 in February. This left the PMI still above the 50.0 mark separating growth from contraction though below its 53.1 long-term series average.

European manufacturers are facing at the moment," said Chris Williamson, chief economist at data compiler NTC. But he added there were warning signs for the months ahead: "Order books are beginning to stagnate, and it's a pretty stark contrast when you compare it to even January's figure."

The output index tumbled to 53.4 last month, its lowest since October, from 56.0 in February. The slowdown in manufacturing growth was accompanied by price pressures that saw firms struggle to handle rising costs while keeping factory gate prices competitive. Input prices jumped to a 20-month high in March, rising to to 74.7 from February's 68.8, while output prices fell to a three-month low of 57.3.

"Over half of all firms recorded a rise in costs during the latest survey period, which they attributed to higher prices paid for oil, steel and general raw materials," NTC said in a statement. "Faltering demand and competitive pressures were cited as factors limiting pricing power and contributing to an easing in the rate of charge inflation to the lowest in three months," it said.