FX.co ★ France Manufacturing Downturn Deepens

The HCOB France Manufacturing PMI fell to 47.8 in June 2025, down from 49.8 in May, missing market expectations of stability at 50, based on preliminary estimates. This decline indicates a more pronounced contraction, marking the most significant in four months, primarily due to the first drop in production in a quarter. Manufacturers cited several challenges: the fastest decrease in factory orders since February, driven by heightened international competition, sluggish demand from the automotive industry, and postponed client decisions. Additionally, new export orders decreased at a faster rate, and inflationary pressures intensified. The future remains uncertain as the sector grapples with weakening domestic demand and declining new orders. Although the European Central Bank's rate cuts, EU deregulation, and anticipated defense expenditure might offer some relief, threats from global trade disruptions, escalating geopolitical tensions in the Middle East, and increasing international competition continue to obscure the outlook.