French manufacturing downturn eases as PMI hits seven-month high

PARIS (Reuters) - France's manufacturing downturn showed signs of easing at the start of 2025, as the HCOB France Manufacturing Purchasing Managers’ Index rose to its highest level since last June, a survey showed on Monday.

The index, compiled by S&P Global, rose to 45.0 in January from 41.9 in December. Despite remaining below the 50.0 threshold that indicates growth, the rise suggests a notable easing of the sector's contraction.

The survey highlighted the softest decrease in factory output since July, with new orders also declining at a slower pace amid reduced drag from export markets.

Still, French manufacturers continued to face weak demand and there was a further reduction in employment. Factory workforce numbers fell for the 20th consecutive month, primarily through the non-renewal of temporary contracts.

"France's manufacturing industry remains in a deep recession," said Dr Tariq Kamal Chaudhry, economist at Hamburg Commercial Bank AG, noting that political uncertainty in France had added to manufacturers' concerns.

Input prices increased modestly, while output prices were discounted for the fourth month as firms navigated competitive pressures. Despite the challenges, business sentiment hit a five-month high, reflecting reduced pessimism compared to the end of 2024.

(Reporting by Hugh Lawson; Editing by Christina Fincher)