France December final manufacturing PMI 50.7 vs 50.6 prelim

In December, France's manufacturing PMI rose to 50.7, surpassing the forecast of 50.6, indicating a modest increase in sector activity. A strong rise in new export orders has been a key driver of sentiment, while employment conditions also returned to growth. Output volumes are stabilizing after a sharp contraction in November. HCOB notes that the improved business conditions are a significant development for the French manufacturing sector. Looking ahead, the sector is expected to benefit from large-scale orders in defense and aerospace, but persistent political instability continues to pose uncertainty for businesses and households. Production at French manufacturing plants has broadly stabilized this month, with export orders proving to be a key support. However, pressures on supply chains and cautious customer behavior continue to limit output. Companies are meeting orders by drawing down inventories and purchasing activity, which has been declining since 2022, is now approaching stabilization, potentially signaling that the sector may have reached its trough. Additionally, the slight improvement in business conditions prompted firms to raise prices, although margin pressures may persist if demand does not strengthen further.