FX.co ★ French Manufacturing Contracts at Slowest in 2 Years

In March 2025, the HCOB France Manufacturing PMI increased to 48.5, slightly below the initial forecast of 48.9 but showing improvement from February's 45.8. Although still indicative of a contraction, this decline was the mildest observed in over two years. Production and new orders saw their slowest decline in nearly three years, propelled by growth in consumer goods and increased demand from Africa and Asia. Companies continued their cost-cutting measures, albeit at a reduced rate, which included decreases in employment, purchases, and inventory levels. At the same time, cost pressures heightened with input prices climbing at the fastest pace seen in seven months, attributed to a stronger dollar and increased supplier prices. However, due to competitive pressures, manufacturers reduced output prices for the fifth time in six months. Looking forward, business confidence reached a nine-month peak, but lingering concerns over geopolitical uncertainties and client spending tempered overall optimism.