French manufacturing appears to be making a comeback.
The country’s manufacturing Purchasing Managers Index, a survey-based indicator of momentum in the goods-producing sector compiled by Markit, posted the biggest rise of any major economy in the first quarter of 2014, advancing to 52.1 from 47.0.
“The French manufacturing sector delivered a much-improved performance in March, buoyed by solid growth of new orders,” said Jack Kennedy, a senior economist at Markit, in a press release. “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. If input prices continue to fall, French manufacturers may look to gain a competitive edge through cutting output prices.”
Readings below 50 on the index indicate varying degrees of contraction in activity, whereas readings above 50 indicate varying degrees of expansion, and a 50 reading implies no change from the previous month.
Chart 1 shows just-released March manufacturing PMI data for all of the countries tracked by Markit.
Ireland, the Czech Republic, and the United States all clocked in at 55.5, meaning manufacturing growth in those countries outpaced that in the rest of the world last month.
France, Spain, and Ireland saw the biggest increase in their respective PMIs relative to three months ago, marking the most-improved manufacturing sectors in the first quarter of 2014.
Russia, China, and Greece are the only countries sub-50 (contractionary) PMI readings, while Russia and China claim the only manufacturing sectors where not only is manufacturing activity contracting, but the pace of contraction is accelerating.
Most countries currently fall under the category of those with manufacturing sectors that continue to expand, but are experiencing a slowdown in the pace of expansion. These countries are shown in the lower-right quadrant of the chart.