Survey: French Manufacturing Output Falls Sharply in March

French manufacturing activity fell sharply in March, a closely watched index of activity showed on Monday.

A final estimate from the marketing group Markit put the purchasing managers index at 46.7 points, the lowest level since June 2009.

The index fell from 50 points in February. A reading below 50 is considered to point to shrinking activity.

The PMI index is a leading indicator of likely trends in the economy.

Markit economist Jack Kennedy said that French manufacturing, after picking up in February, returned to a trend of shrinkage in March.

This highlighted what he termed a growing risk that data for gross domestic product would show a slight contraction for the first quarter of 2012.

Several indicators point in this direction.

The survey signaled that production was falling and that the amount of new orders taken had shown the biggest fall for nearly three years owing mainly to weak demand in France.

Meanwhile, unemployment is high.

The PMI index is based on a survey of more than 400 companies in the French manufacturing sector.

Copyright Agence France-Presse, 2012