Published by Global Banking & Finance Review®
Posted on August 1, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GoogleFrance's manufacturing sector faces its sharpest decline in new orders since January, with PMI at 48.2 in July. Economic headwinds and global tensions contribute to the downturn.
PARIS (Reuters) -France's manufacturing sector experienced a rapid decline in new orders in July, marking the sharpest drop since January, as demand for goods, particularly from abroad, fell sharply, according to a survey published on Friday.
The final HCOB France Manufacturing PMI survey compiled by S&P Global registered 48.2 in July, slightly up from 48.1 in June but still below the 50.0 threshold that indicates growth in activity. This points to a moderate decline in operating conditions faced by French factories.
The manufacturing PMI has now been below the 50.0 level since January 2023. The final figure is slightly lower than the flash reading of 48.8.
The downturn in new orders, a key component of the PMI, was accelerating, with client hesitancy and domestic economic headwinds cited as contributing factors. New export sales also sank rapidly, hitting their lowest mark in the year-to-date.
"The economic outlook for France's manufacturing sector has noticeably deteriorated at the beginning of the second half of the year," said Jonas Feldhusen, economist at Hamburg Commercial Bank AG.
"Although the headline manufacturing index edged up slightly, the sharp deterioration in order intakes and business expectations are causes for concern," Feldhusen said.
Despite the challenging environment, factory employment numbers ticked higher for the third consecutive month, although recruitment was mainly focused on temporary staff.
French manufacturers also faced lengthening delivery times, the most pronounced in two-and-a-half years, due to labour shortages and strikes at suppliers.
Prices charged for French goods rose for the first time in five months, as companies passed on higher cost burdens to customers.
The survey highlighted growing uncertainty in the sector attributed to global trade tensions and domestic austerity measures, which may lead to further headwinds in the coming months.
(Reporting by Benoit Van Overstraeten; Editing by Toby Chopra)
PMI stands for Purchasing Managers' Index, a measure of the prevailing direction of economic trends in manufacturing and service sectors. It is based on surveys of private sector companies.
New orders refer to the total volume of orders received by manufacturers for products that have not yet been completed. It is a key indicator of future production activity.
A PMI reading below 50.0 indicates a contraction in the manufacturing sector, suggesting that economic activity is declining.
Export sales are the sales of goods produced in one country and sold to buyers in another country. They are crucial for measuring a country's manufacturing performance.
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