The recovery in French private sector activity slowed for a third consecutive month in February, a key survey today showed, casting doubt over the strength of the country's climb out of recession.
The Markit/CDAF flash composite purchasing managers' index, which combines data from both the services and manufacturing sector, fell to 55.7 in February from 58.0 previously.
The reading was the lowest in five months, but still comfortably ahead of the 50 mark separating growth from contraction.
"There is a very worrying picture where growth has slowed quite sharply for three successive months and it is expanding at half the rate it was back in November in terms of output and order books," said Chris Williamson, an economist at Markit.
"The sustainability of the recovery has more question marks raised over it by these numbers," he said.
The fall in the overall index reflected weaker-than-expected expansions of activity in both the manufacturing and service sectors.
Growth in incoming new business eased partly due to bad weather conditions, according to anecdotal evidence, Markit said.
"The harsh weather has possibly blurred the picture and we will know more when the adverse impact of the weather has gone but irrespective of that we are seeing some loss of momentum here," Mr Williamson said.
There were signs of labour market stabilisation in February, as employment eased only slightly and at its weakest rate since June 2008, the survey showed.
Input price inflation in the French private sector economy accelerated to a 16-month high.
France, the euro zone's second-largest economy, recently raised its forecast for 2010 GDP growth to 1.4 per cent, from 0.75 per cent previously, citing improvements in the international environment.
Reuters