French private-sector business output shrank in March after a two-month reprieve from recessionary pressures, with a marked dip in factory activity and reports of weakening domestic demand that will be unwelcome news for a government heading into presidential and legislative elections.
The Market/CDAF flash manufacturing purchasing managers' index (PMI) slid to 47.6 in March from a February level of 50.0 that is the watermark below which activity is considered to be shrinking.
An equivalent index that attempts to measure activity in the larger services sector stayed at 50.0, stable but on the brink.
"The safest thing you can say is that these data suggest the French economy probably stagnated in the first quarter, avoiding a double-dip recession by the narrowest of margins," said Chris Williamson, chief economists at PMI survey compiler Market.
"Unless new orders start picking up, then companies are going to be cutting back their employment levels and scaling back their operations, which spells trouble for the second quarter. You could well see GDP contract in the second quarter at this rate."