French manufacturing activity grew at its slowest pace in six months in August as shortages of materials and transportation delays continued to weigh, a monthly business survey showed on Wednesday.
Data compiler IHS Markit said its final manufacturing Purchasing Managers’ Index (PMI) fell to 57.5 points from 58.0 in July – its lowest reading since February’s 56.1.
The index was nevertheless slightly above a preliminary reading for August of 57.3 points and remained well above the 50 point line dividing expansions in activity from contractions.
“Economic conditions in France’s manufacturing sector remain strong as we head towards the end of the third quarter, although further slowdowns in the rate of output and new order growth suggest we’re well past the peak” said IHS Markit senior economist Joe Hayes.
“Fears are however starting to mount as to when the material shortages, delivery delays and intense price pressures will take their toll,” Hayes added.
A global semiconductor chip shortage has caused major delays to manufacturing, with automakers cutting down on production and electronic device makers struggling to keep up with a pandemic-led surge in demand for phones, TVs and gaming consoles.
The strained supply chains increasingly leave firms with little choice but to raise their prices.
Finance Minister Bruno Le Maire said this week that the French economy was “doing well” thanks to a rise in consumer spending, even with restrictions still in place to tackle a fourth coronavirus wave in the country.
He said the aim now was for the euro zone’s second-biggest economy to return to pre-COVID-19 growth levels by year-end.
France has a 6% growth target for the whole of 2021.