By James Mackenzie
PARIS, Nov 2 (Reuters) - French manufacturers reported output rising at its fastest pace in more than nine years in October, lifted by robust new orders in home markets, according to a purchasing managers survey on Monday.
The Markit/CDAF final manufacturing purchasing managers' index rose to its highest level in almost three years, climbing to 55.6 in October (flash reading: 55.3) from 53.0 in September and adding to optimism in the euro zone's second largest economy.
"While some of the current strength reflects a rebound from the extreme weakness seen in the aftermath of the financial crisis, it nevertheless offers further evidence that France is towards the front of the pack among developed economies in emerging from the downturn," Markit economist Jack Kennedy said.
Production rose for the fourth month in a row, fuelled by the consumer and intermediate sectors, the survey showed. The output component of the index rose to 60.1 (flash 59.6), the highest level since September 2000, from 57.6 in August.
New orders also continued to increase, reaching their highest level in almost three years, and anecdotal evidence pointed to improved demand and new products.
"Domestic demand remains the key driver of growth as confidence continues to recover," Kennedy said.
New export orders showed much weaker growth than the overall rise in new orders. Asia and the euro zone were cited as sources of new export business growth.
Backlogs rose for the third month in a row as the pace of expansion accelerated to the fastest rate since December 2007 and almost 30 percent of firms reported an increase in outstanding business.
Destocking also continued as manufacturers kept running down inventories, helped by stronger-than-expected sales and efforts to boost cash flow.
The constraints on production capacity were reflected in job trends. While manufacturing employment declined, in line with the pattern seen since May 2008, the rate of contraction was the slowest in 14 months, the survey showed.
Higher prices for raw materials including steel, plastics and oil lifted costs for manufacturers while average suppliers' delivery times lengthened at the sharpest rate in just over three years.
Manufacturers themselves faced continuing pressure on output prices, leading to a 12th successive fall and the sharpest drop since July, the survey showed. (Editing by Stephen Nisbet)