French manufacturing activity remained in contraction in January 2025, with the HCOB PMI at 45, slightly below the initial estimate of 45.3 but up from 41.9 in December.
French factory decline moderates
While still signaling recession, the sector's decline moderated, as production and new orders fell at a slower rate. New business also decreased at the softest pace since June, and export orders showed the smallest drop in four months. Employment continued its downward trend, and businesses reduced both inventories and purchasing activity in an effort to cut costs. Despite weakening demand, manufacturers were able to work through existing backlogs, with the rate of backlog depletion slowing.
Price relief, but French manufacturers wary
Price pressures eased somewhat, with input costs rising only modestly, and companies continued to offer discounts due to competitive pressures and client demands. Looking forward, manufacturers expressed general pessimism about future prospects, citing political uncertainties and difficulties in other sectors as potential obstacles.
