That’s a modest revision higher with output rising for the first time in nearly three years. Overall, industry activity is still seen contracting but there is some underlying improvement at least. That said, there are softness in the data with employment, purchasing, and stocks all declining on the month. HCOB notes that:
“Since the beginning of 2025, the French manufacturing PMI has shown tentative signs of recovery, with the headline index
nearing the growth level and output increasing for the first time in almost three years in April. This upswing comes as a bit of
a surprise, given the turbulence over the past few weeks and the darkened outlook for global trade.
“Orders from both domestic and foreign clients remain in contraction, albeit at a significantly reduced rate. This suggests
potential improvements in underlying business conditions within the manufacturing sector. While US tariffs are expected to
negatively impact French manufacturing and heighten uncertainty, lower interest rates from the ECB and credible EU efforts
to reduce bureaucratic hurdles and massively increase defence spending could stimulate manufacturing activity. On that
note, future business expectations have risen to their highest level in nearly a year. Despite this, French manufacturers
continue to reduce staffing levels, although the reduction was relatively moderate. Anecdotal evidence indicates that
workforce capacity was streamlined by not replacing departing employees and opting against renewing fixed-term contracts.
“Price dynamics are not a major concern. Input prices have only seen a slight increase, likely benefiting from the decline in
energy prices, particularly oil and gas, driven by recession fears. Factory gate charges have decreased for the second
consecutive month due to competitive pressures.
“A sub-sectoral analysis revealed no significant changes from the previous month across the consumer, intermediate, and
investment goods segments. Consumer goods producers experienced a slight improvement in conditions once again, while
the intermediate and investment goods sectors remained marginally below the growth threshold.”
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