French private sector edges toward stability

The HCOB France Composite PMI climbed to 49.9 in November 2025, its highest level since August 2024, improving from 47.7 in October and surpassing market expectations of 48.1, according to flash estimates.

The latest reading points to an economy that is close to stabilizing after more than a year of contraction. The improvement was driven mainly by a rebound in services, where the PMI rose to 50.8 from 48.0, signaling a return to modest expansion. This helped offset the drag from the industrial sector, where the downturn deepened.

France’s HCOB Flash Manufacturing PMI slipped to 47.8 from 48.8, hitting a nine-month low and indicating a renewed deterioration in factory conditions. Output declined at a faster rate, with the production index dropping to 45.2, as political uncertainty and lingering budget disputes continued to dampen domestic demand.

New orders fell again, although the slump was partially cushioned by a return to growth in export orders—the first since early 2022—which provided a small lift to backlogs.

Hiring momentum also weakened. After several months of marginal gains, manufacturers reduced staffing levels, reflecting caution amid tightening margins and subdued demand.

Input cost inflation accelerated, driven by higher metals prices and rising wage pressures, yet selling prices were largely unchanged, underscoring firms’ limited pricing power in a competitive and demand-constrained environment.

Despite the softer current conditions, business sentiment improved to its strongest level since June, suggesting firms are cautiously optimistic that the worst of the downturn may be behind them. However, confidence remains fragile by historical standards, with companies still wary of political risks and uncertainties surrounding fiscal policy.