French manufacturing picked up in January despite lockdown threat: PMI

A worker is seen at the Rafaut factory, an equipment supplier to French Ministry of Defense and to civilian aeronautics major primes, at Villeneuve-la-Garenne near Paris, France

French manufacturing gained momentum in January at the fastest rate in six months as client demand firmed and in spite of growing prospects for a new coronavirus lockdown, a monthly survey showed on Monday.

Data compiler IHS Markit said its final purchasing managers’ index rose to 51.6 in January from 51.1 in December, reaching the highest level since last July.

The result was also marginally better than a preliminary reading of 51.5 and brought the index further from the 50-point line dividing expansions in activity from contractions.

“January’s PMI results were emblematic of the current situation with COVID-19 as demand conditions began to improve amid expectations of a recovery, while output remained subdued because of ongoing restrictions designed to stem the spread of the virus,” IHS Markit economist Eliot Kerr said.

Manufacturing activity has picked up since slipping in November when France was under its second coronavirus lockdown, which hit the bigger service sector harder because many restaurants, non-essential retail outlets and hotels were forced to close while factories remained operational.

After restrictions were eased in December, France was on tenterhooks through much of January on speculation that a new third lockdown would be imposed.

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