PMI Survey Shows France Manufacturing Activity Hit 3.5-Year High In December
France’s manufacturing sector ended 2025 on its strongest footing in more than three years, with business activity returning to expansion territory in December, according to HCOB PMI survey data released on January 2, 2026.
The seasonally adjusted HCOB France Manufacturing Purchasing Managers’ Index (PMI) rose to 50.7 in December, up from 47.8 in November, breaking a three-month contraction streak and marking the sector’s best performance since June 2022.
The upturn was driven largely by a sharp recovery in export demand, with new export orders rising at the fastest pace in nearly four years. Manufacturers reported stronger sales to Eastern and Southern Europe, North America and parts of Africa, helping to offset continued softness in domestic demand.
Employment conditions also improved. Factory hiring expanded at the fastest rate since August 2024, marking the seventh instance in the past eight months in which job creation outpaced layoffs in the sector.
Production levels nearly stabilised following November’s steep decline. While purchasing activity and inventories continued to fall, the pace of contraction slowed as firms reduced input buying and stock holdings to streamline operations and avoid excess supply.
Cost pressures remained elevated but showed signs of easing. Input prices increased for the 14th consecutive month, though at a slower pace and below the survey’s long-term average. Manufacturers also raised output prices for the first time since August 2025, passing higher costs on to customers.
Looking ahead, French manufacturers expressed cautious optimism for 2026, supported by expectations of stronger sales and planned product launches. However, confidence remained muted by ongoing domestic political uncertainty.
“2025 closes on a surprisingly upbeat note,” said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank. “While this does not erase the structural challenges of recent years, it is clearly a step in the right direction.”
Feldhusen added that the sector could benefit from large-scale defence and aerospace orders, particularly from overseas, but warned that political instability and uncertainty among businesses and households continue to pose significant risks to the outlook.
