French Manufacturing Downturn Deepens to Nine-Month Low in November

Manufacturing Sector Faces Renewed Deterioration

France's manufacturing sector experienced a significant setback in November 2025, as the HCOB Flash Manufacturing Purchasing Managers' Index (PMI) slipped to 47.8. This figure represents a nine-month low, down from 48.8 in October, and signals a renewed and accelerated deterioration in factory conditions across the country. A PMI reading below 50 indicates contraction in the sector.

The decline was primarily driven by a quicker pace of reduction in output, with the production index falling to 45.2, also a nine-month low. New orders continued to decrease, reflecting ongoing challenges in demand.

Key Factors Contributing to the Downturn

Several factors have been identified as contributing to the deepening downturn in French manufacturing:

• Political Uncertainty and Budget Tensions: Ongoing political uncertainty and unresolved budget tensions continue to weigh heavily on demand within the sector.
• Softening Employment: Manufacturers have begun cutting staff after a period of modest hiring, leading to a softening in employment. Net employment fell for the first time since July across both manufacturing and services sectors.
• Rising Costs and Lack of Pricing Power: Cost pressures intensified, driven by higher metals prices and rising wage expenses. However, selling prices remained largely unchanged, indicating that firms lacked the pricing power to pass on these increased costs to consumers.
• Structural Challenges: Broader structural challenges, compounded by US trade policy and Chinese competition, have also been cited as contributing to the sector's difficulties.

Despite the overall negative trend, there was a notable positive development in export orders, which saw a return to growth for the first time since early 2022, partially offsetting the domestic downturn.

Broader Economic Context and Expert Commentary

While the manufacturing sector struggles, the broader French private sector shows signs of stabilization. The HCOB Flash France Composite PMI, which includes both manufacturing and services, rose to 49.9 in November from 47.7 in October. This near-stabilization was largely due to a rebound in the services sector, where the PMI reached 50.8, marking its first expansion in 15 months.

Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, commented on the data, stating that 'the manufacturing sector remains under pressure' and 'the PMI deteriorated in November, meaning that manufacturing remains the problem child of the economy.' He added that 'the foundation of this stabilisation remains on shaky ground' given the unresolved budget and persistent political tension.

Despite the challenging current environment, business confidence among manufacturers improved to its strongest level since June, though it remains subdued by historical standards.