The activity of the French manufacturing sector rebounded strongly in May and its growth rate “displays its highest level“For more than twenty years, but production backlogs have accumulated, warns the firm IHS Markit on Tuesday.
Read also :The rebound in the economy will be driven by industry
Business in full expansion
The PMI buyers index – which measures the performance of the sector based on data collected from a panel of 400 companies operating in France – reached 59.4 from 28.9 in April. An index above 50 indicates an expansion in activity, while an index below 50 illustrates a contraction.
The level reached in May “once again signals a strong improvement in the economy of the French manufacturing sector, with the growth rate posting its highest level since September 2000», Summarizes the cabinet. Between February and March, the index had already risen sharply, going from 56.1 to 59.3.
«The easing of measures to stem the Covid-19 pandemic led to a further marked improvement in the economic situation in the French manufacturing sector in May, as growth in production and new orders indeed accelerated compared to the month previous», Indicates the cabinet in its press release.
Read also :Christel Heydemann, industry activist
Coping with the workload
He warns, however, that “Although companies have increased their workforce in order to meet the increased workload, the sharp rise in demand and the bottleneck in supply chains have nevertheless contributed to a large accumulation of production backlogs». «The main challenge companies now face is their ability to cope with the workload, a task made difficult by severe disruptions in supply chains and shortages of raw materials.“, Adds Andrew Harker, economist at IHS Markit, quoted in the press release.
According to him, “We can expect an acceleration in production growth over the coming months, a trend however conditional on easing tensions on supply chains, as well as new job creation».