Exports help French December manufacturing grow at fastest rate in more than three years, PMI shows

PARIS, Jan 2 (Reuters) - French manufacturing activity grew at the fastest rate in 3-1/2 years in December thanks to robust exports, although political uncertainty may create headwinds in 2026, a business survey by S&P Global showed on Friday.

The final purchasing managers' index (PMI) for France's manufacturing sector, as compiled by S&P Global, rose to 50.7 points in December from 47.8 in November, surpassing the 50.0 points threshold marking growth as opposed to contraction.

This marked the end of a three-month period of contraction, with the PMI reaching its highest level since June 2022. The final December manufacturing PMI was also a touch better than the flash manufacturing PMI which had stood at 50.6 points.

S&P Global said new export orders had increased at their fastest rate in nearly four years, helped in particular by the aerospace sector. In November, French aerospace group Safran said it expected a tripling in its annual revenue from India, the world's fastest-growing aviation market.

However, lingering political uncertainty over France's budget could weigh on businesses in 2026, added S&P Global.

"Business conditions in France's manufacturing sector improved in December, with the PMI climbing back above the growth threshold to reach its highest level in three-and-a-half years. While this should not obscure the structural challenges of recent years, it is nonetheless a step in the right direction," said Hamburg Commercial Bank economist Jonas Feldhusen.

"Still, persistent political instability and the resulting uncertainty among businesses and households remain key headwinds for future prospects," he added.

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