France’s March manufacturing PMI final value is 46.2 vs. preliminary value is 45.8

The French manufacturing industry remained sluggish in March, with demand conditions continuing to put pressure on overall activity. Production may be declining at its slowest pace in nearly two years, but it will need to fall further if the sector is to turn a corner. Notably, new orders for the month fell further into contraction territory. And it highlights a major problem currently facing the sector. HCOB points out:

“French manufacturing’s recovery will be delayed until at least the second quarter. Output fell at the slowest pace in a series of contractions in nearly two years, but the sector is suffering from weak customer demand, We continue to face major challenges due to rising interest rates and rising interest rates.”The struggle of manufacturers is evidenced by the fact that companies in all sectors are cutting staff.

“The improvement in French manufacturing in March was limited to consumer goods. Output in the consumer goods sector increased significantly, but the other two sectors (investments and intermediate goods) declined for a further month.Customers Demand for consumer goods was the strongest in the sector, which also drove the rise.”Sales prices for consumer goods hit a 10-month high.

“Supply chain issues appear to be decreasing. Manufacturers are shaking off supply chain disruptions from Houthi attacks in the Red Sea. PMI for supplier delivery times has risen again, pushing the index to its lowest level. After falling, it reached around 50, which indicates stability.”January was the lowest level in about a year.

“French manufacturing is looking to the future with optimism. Although the Future Production Index has been above 50 for the second month in a row and is still below the historical average, manufacturing is expected to benefit from improved demand due to the economic impact. “We are optimistic that the economy will recover this year. Expectations for further interest rate cuts and improvements in the French and global economies are supporting business expectations.”