FX.co ★ French Manufacturing Sector Weakens in September

The HCOB France Manufacturing PMI dropped to 48.2 in September 2025, a decline from 50.4 in August and slightly above the preliminary estimate of 48.1. This decline highlights sharper decreases in both output and new orders, coinciding with the lowest level of business confidence since January, following the political turbulence stemming from the collapse of the Bayrou government. Export demand was also adversely affected, with companies attributing the drop to US-imposed tariffs and stagnant global market conditions. In response, manufacturers reduced their purchasing activities and inventory levels, with pre-production and finished goods inventories experiencing significant reductions—the latter marking the most substantial decrease in nearly five years. Despite the subdued demand, input costs saw moderate increases. However, competitive pressures forced companies to lower their output prices. Employment in the sector continued to grow for the fifth consecutive month, albeit at a slower rate, indicating a more cautious approach to hiring.