FX.co ★ France Manufacturing Downturn Continues

The HCOB France Manufacturing PMI slightly increased to 48.4 in July 2025, up from 48.1 in June, but it still remained below the critical 50 mark, signifying ongoing contraction within the sector, as per preliminary estimates. While output experienced a modest improvement, the sector's overall conditions stayed fragile, with new orders decreasing at their most rapid rate since February, primarily due to diminished export demand. In spite of the challenging environment, factory employment saw a slight increase—the most robust growth in two-and-a-half years—as some companies opted to hire fixed-term staff. Regarding pricing, factory gate prices showed a minor uptick after recent declines, providing modest relief and assisting firms in recouping some lost margins. Looking forward, business confidence among manufacturers fell significantly to its lowest point since November 2024, driven by increasing worries over tighter budgets, a weaker sales forecast, and persistent political uncertainty. Additionally, risks remain heightened due to domestic austerity measures and ongoing global trade tensions.