The HCOB France Composite PMI increased to 48.3 in January 2025, up from 47.5 in December and slightly ahead of market expectations of 47.7, according to preliminary estimates.
French private sector downturn eases
While the data indicated the fifth consecutive month of contraction in the private sector, it also signaled the mildest decline in four months. This softer contraction was mainly driven by the manufacturing sector (PMI at 45.3 vs 41.9 in December), which saw its smallest production decline since mid-2024. In contrast, services activity contracted at a faster rate (PMI at 48.9 vs 49.3).
New orders fell at a slower pace
New orders fell at a slower pace, with some improvement in market conditions and client interest, resulting in the least severe contraction in private sector output since September. Selling prices were reduced for the first time in nearly four years, despite rising cost pressures. However, the rate of job cuts was the steepest since October 2020, and business confidence weakened, with companies adopting a neutral 12-month outlook, compared to the slight optimism recorded in December.
