French August manufacturing fell back in August from July - PMI

PARIS (Reuters) - French factory activity slipped back into contractionary territory in August as the euro zone's second-biggest economy grappled with hits to business caused by the COVID-19 pandemic, a survey showed on Tuesday.

Data compiler IHS Markit said its final Purchasing Managers' Index (PMI) for manufacturing was 49.8 points in August, down from 52.4 in July and below the 50-point line denoting growth but slightly above a flash estimate of 49.0.

"Following two months of strong growth, the French manufacturing sector suffered a slight setback on its path to recovery, as the rate of output expansion eased substantially in August," said IHS Markit economist Eliot Kerr.

"New orders barely registered an increase, highlighting the hesitancy among manufacturers' clients to commit to future business. The slower production growth also brought with it a reacceleration in the rate of job-cutting and we saw nervousness from businesses regarding the year ahead, with sentiment softening to the weakest for three months," he added.

France is due to present on Sept. 3 more details of its previously announced 100 billion euro (88.75 billion pounds) economic recovery plan. The French economy is currently forecast to contract by 11% in 2020.

(Reporting by Sudip Kar-Gupta; Editing by Catherine Evans)