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PARIS, (Reuters) - French manufacturing activity shrank at the fastest rate in six months in June as firms cut production for the first time in five months and new orders dropped at the quickest rate this year, a survey showed on Tuesday.
In its monthly snapshot of activity in the long-struggling sector, data compiler Markit said its final purchasing managers' index fell to 48.2 in June from 49.6 in May.
That was slightly higher than a preliminary reading of 47.8 but still short of the 50-point line dividing expansions in activity from contractions.
Weakening demand from clients both at home and abroad, including China, contracting operating margins and a return to falling output volumes contributed to what Markit said was the "steepest pace of manufacturing job shedding" since the end of 2013.
"France's manufacturing sector is back in reverse gear and weakness looks set to persist through the summer," said Markit senior economist Tim Moore.
Purchasing managers surveyed by Markit said they were concerned about the outlook for client spending and noted the higher cost of raw materials, especially metals.
The weak performance by the manufacturing sector in France adds to pressure on President Francois Hollande as he tries to revive the economy and create jobs by tying tax breaks for businesses to new targets for hiring and investing.
Reporting by Alexandria Sage; Editing by Hugh Lawson