French Manufacturing Downturn Continues

France’s S&P Global Manufacturing PMI slipped to 50.0 in March 2026 from 50.1 in February, revising lower from initial estimates of 50.2, signaling broadly stagnant conditions. Factory output fell for the first time in 2026, dragged down by weaker domestic and export demand, while new orders dropped at the fastest pace in five months amid cancellations and postponements. Suppliers’ delivery times lengthened sharply, the most since January 2023, reflecting Middle East–related logistics disruptions. Manufacturing employment declined marginally, and pre-production inventories fell for the first time in three months. On prices, input costs surged at the fastest rate since December 2022, driven by higher oil, electricity, metals, and chemicals. While output prices rose to a three-year high, they remained contained, trailing input cost increases by a wide margin. Lastly, business confidence eased to a five-month low.

The S&P Global France Manufacturing PMI inched up to 50.2 in March 2026 from 50.1 in February, staying just above the 50 no-change threshold and beating forecasts of a contraction to 49.5, according to preliminary estimates. Despite this, output fell, marking the first decline of the year, while new orders weakened further. This comes as overall demand contracted at the sharpest pace since July 2025, reflecting subdued domestic conditions and a notable drop in exports amid geopolitical uncertainty. Employment also edged lower as firms remained cautious in hiring. Supply-side pressures intensified, with delivery times lengthening to their greatest extent in over three years due to disruptions linked to the Middle East conflict. On price, input cost inflation accelerated to its highest level since November 2023, driven by rising energy and raw material prices, while output prices increased at a faster pace. Lastly, business confidence weakened.

France’s HCOB Manufacturing PMI slipped to 50.1 in February 2026 from January’s 51.2, revising higher from initial estimates of 49.9, signaling broad stagnation in the sector. Factory output rose at a slightly softer pace than in January, while new orders decreased marginally, weighed down by weaker domestic and export demand. Stocks of finished goods rose for the first time since last July, reflecting the combination of rising output and softer new orders, whereas pre-production inventories remained broadly stable as manufacturers maintained leaner purchasing. Factory employment fell for the first time in three months, with permanent staff reductions reported. On the cost side, input prices increased at the fastest rate in six months, prompting firms to lift output prices at their steepest rate in a year-and-a-half. Despite the slowdown in orders, manufacturers remained optimistic for growth over the next 12 months, supported by healthy sales pipelines and positive demand forecasts.