French manufacturing downturn eases in February, PMI shows

Paris: France’s prolonged manufacturing downturn showed signs of easing in February as declines in output and new orders slowed, a survey compiled by S&P Global showed on Monday.

The HCOB France Manufacturing PMI rose to 45.8 in February from 45.0 in January, marking the shallowest contraction in nine months. Despite remaining below the 50.0 threshold that indicates growth, the data suggests a slight improvement in the sector.

“French manufacturing industry is so weak that a slower contraction signalled by the HCOB PMI in February is a small consolation,” said Tariq Kamal Chaudhry, economist at Hamburg Commercial Bank AG.

He noted that political instability in France, including no-confidence votes and ideological divisions, had contributed to the economic challenges.

Input cost inflation reached a six-month high, driven by rising prices for energy, fuels, and raw materials. However, firms struggled to pass these costs onto customers, with output prices increasing only marginally.

New orders continued to fall, although the decline was the slowest in eight months, with some firms reporting increased interest from international markets, including the United States and Asia-Pacific.

French manufacturers continued to cut jobs, extending a trend that began in June 2023, although the pace of job losses was the slowest in three months.

Business confidence improved, with future output expectations turning positive for the first time since last July, despite ongoing concerns about key industries like vehicle manufacturing and construction.