France Sees ‘Marginal’ Growth as Manufacturing Shrinks Again

France’s economic growth remained sluggish at the start of the second quarter as manufacturing shrank the most in eight months.

Markit Economics said its composite Purchasing Managers Index rose to 50.5 in April from 50 the previous month. A factory gauge fell to 48.3 from 49.6, dropping further below the 50 level that separates growth and contraction.

Though France posted its strongest growth in four years in 2015 and some surveys showed business confidence climbing, slowing global demand could knock the nation’s fragile recovery off track. That poses a challenge to President Francois Hollande, who conditioned a 2017 re-election bid on achieving a durable drop in unemployment.

“The French private sector economy eked out marginal growth at the start of the second quarter,” said Jack Kennedy, an economist at Markit in London. It’s “stuck in a weak growth trajectory accompanied by little meaningful job creation.”

Economists in Bloomberg’s monthly survey forecast expansion of 0.3 percent in the first and second quarters. That would match the pace of the last three months of 2015.

Markit’s services index for France rose to 50.8 in April from 49.9 in March. That’s the highest since November.

While new business at services firms increased, factories saw the biggest drop in new orders since February 2015.

The composite PMI for the 19-nation euro area probably increased to 53.3 this month from 53.1, according to the median forecast of economists in a Bloomberg survey. Markit will publish that report at 9 a.m. London time.

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