PARIS (Reuters) – French business activity held up better than expected in March as the country faced new coronavirus restrictions, with manufacturing surging ahead at the fastest pace in more than three years, a monthly survey showed on Wednesday.
Data compiler IHS Markit said that its preliminary Purchasing Managers’ Index (PMI) rose to 49.5 points in March from 47.0 in February, even though large parts of the country faced tougher COVID-19 restrictions as infections steadily rose.
The result easily beat economists’ average expectations in a Reuters poll for a reading of 47.2 and was just shy of the 50-point threshold that would indicate an expansion in activity.
Meanwhile, the flash PMI for manufacturing jumped to 58.8 from 56.1, hitting the highest level since December 2017 and smashing expectations for a reading of 56.5.
The larger services sector, which has been hit harder by coronavirus restrictions that forced most restaurants, hotels and cultural venues to shutter, saw its flash PMI rise to 47.8 from 45.6, well above expectations for 45.5.
Last week, France imposed a month-long soft lockdown on Paris and parts of northern France as new infections climbed higher and its vaccine rollout struggled to gain momentum.
The new measures force non-essential retail outlets to close – although exceptions are numerous – and limit people’s movements to 10 kilometres (6.2 miles) from home.
IHS Markit economist Eliot Kerr said that while business activity had trended towards stabilisation this month, not all would be smooth sailing going forward.
“The threat of setbacks to the reopening of the economy remains tangible. The recent reintroduction of lockdown restrictions in Paris serves as a reminder that the road to recovery may still be a bumpy one,” he added.
Nonetheless, he noted that new orders were steady in March after six months of continuous declines, while hiring improved further and firms were confident of a rise in activity once restrictions are relaxed.
(Reporting by Leigh Thomas; Editing by Catherine Evans)
