French factories post first output rise in nearly three years in April, PMI shows

PARIS (Reuters) -

France's manufacturing sector posted its first rise in output in nearly three years in April, and expectations of greater military spending could help offset the impact of uncertainty over U.S. tariffs, a survey showed on Friday.

The HCOB final purchasing managers index (PMI) for France's manufacturing sector, as compiled by S&P Global, rose to 48.7 in April from 48.5 in March, marking its highest level since January 2023.

Any figure below 50 points marks a contraction, while above 50 shows an expansion. The final April figure was up from a flash manufacturing PMI reading of 48.2.

European countries are aiming to bulk up their military spending, and S&P Global said this could benefit manufacturing companies.

"Orders from both domestic and foreign clients remain in contraction, albeit at a significantly reduced rate. This suggests potential improvements in underlying business conditions within the manufacturing sector," said Jonas Feldhusen, Economist at Hamburg Commercial Bank AG.

"While U.S. tariffs are expected to negatively impact French manufacturing and heighten uncertainty, lower interest rates from the ECB and credible EU efforts to reduce bureaucratic hurdles and massively increase defence spending could stimulate manufacturing activity," he added.

(Reporting by Sudip Kar-Gupta; Editing by Hugh Lawson)