The HCOB France Manufacturing PMI dropped to 47.8 in June 2025 from 49.8 in May, falling short of market expectations of stabilization at 50, according to preliminary estimates. The reading signaled a sharper contraction and was the steepest in four months, driven by the first decline in production in three months. Manufacturers also reported the fastest drop in factory orders since February, citing intense international competition, weak demand from the automotive sector, and delays in client decision-making.
New export orders shrank at a quicker pace, while inflationary pressures accelerated. The outlook remains uncertain as weakening domestic demand and falling new orders weigh on the sector. While ECB rate cuts, EU deregulation, and planned defense spending may provide some support, risks from global trade disruptions, escalating geopolitical tensions in the Middle East, and mounting international competition continue to cloud the outlook.
