PARIS (Reuters) - French manufacturing activity contracted in July by a bit more than initially forecast, according to a monthly survey, highlighting the inflationary pressures on the euro zone's second-biggest economy.

Data compiler S&P Global said its final manufacturing purchasing managers' index (PMI) fell to 49.5 points from 51.4 in June. Any reading below the 50 point line marks a contraction in activity, while above 50 points shows expansion.

The final July reading was slightly below an initial, flash PMI figure of 49.6 points.

Preliminary data published on Friday showed French inflation for July at 6.8%, while inflation across the euro zone accelerated to a record high of 8.9% in July from 8.6% a month earlier.

The July PMI survey suggests the French manufacturing sector is in a recession. Output and new orders both fell at their strongest rates since the initial wave of COVID-19 infections in the first half of 2020 as high inflation squeezed demand, said S&P Global Market Intelligence senior economist Joe Hayes.

Until we see a substantial cooling of price pressures, it's difficult to foresee the economy picking back up. Business confidence remained at a suppressed level during July, reflecting manufacturers' concerns around the outlook for inflation, supply chains and the war in Ukraine, he added.

(Reporting by Sudip Kar-Gupta; Editing by Toby Chopra)