Orders and output pull the PMI lower
October's S&P Global France Manufacturing Purchasing Managers' Index registered 49.5, down from September's 50.6 and below the 50.0 threshold separating growth from contraction. Falling orders and output, the index's two largest components, drove the decline. Still, the final result exceeded the preliminary estimate of 49.3, Reuters reported via MarketScreener.
The drop in new orders was the sharpest since July 2025. Weaker overseas demand also brought a moderate decline in export sales. Factories cut production for the first time in three months, citing poor demand, cash flow difficulties and fragility in the broader economy.
Manufacturers reduced staffing at the quickest pace since May, leaving vacancies unfilled when employees departed. Unfinished work declined for a fourth straight month, while confidence in the coming 12 months sank to a one-year low.
S&P Global collected the survey responses from October 12 to 23. Over the longer term, the French manufacturing PMI averaged 49.74 between 2011 and 2026, according to Trading Economics, citing S&P Global data. Its record high was 59.40 in May 2021, and its record low was 31.50 in April 2020.
Supply delays compound rising costs
Transportation bottlenecks and shortages worsened supply disruptions, pushing delivery delays to their longest since June. Manufacturers bought fewer inputs as production needs declined. They also drew down inventories: some used materials already on hand to manage supply interruptions, while others reduced stocks to cut costs.
Input prices increased at their fastest rate in four months. Respondents reported more expensive raw materials, fuel and energy, specifically identifying chemicals, electronic components, metals, oil and packaging. Manufacturers passed some of those costs on to customers, raising selling prices at the quickest pace since May.
Joe Hayes, senior principal economist at S&P Global Market Intelligence, described a sharp deterioration in demand during October. He said supply-related cost pressures and high energy prices were constraining manufacturers' ability to offer competitive prices.
French weakness contrasts with eurozone stabilization
Across the eurozone, the HCOB Manufacturing PMI edged up to 50.0 in October from 49.8 in September, indicating broadly stable operating conditions rather than the contraction recorded in France.
HCOB chief economist Cyrus de la Rubia described Germany's manufacturing sector as fragile, France's as in recession and Italy's as persistently weak, with Spain managing only subdued growth. He also said France was significantly weighing on demand for industrial goods in other eurozone countries.
France's difficulties extended beyond factories. S&P Global's October 23 flash survey showed the country's private sector slipping back into contraction. French business confidence was at its lowest since 2012, excluding the pandemic period, according to RTÉ's reporting based on Reuters data.
Financial and political backdrop
By late October, French government borrowing costs had risen sharply in recent weeks as investors questioned the country's ability to repair its public finances, RTÉ reported. Repeated street protests had also heightened political tensions ahead of the presidential election in spring 2027.
An October Reuters poll, meanwhile, indicated that the European Central Bank was expected to keep its deposit rate at 2.5% before increasing it by 25 basis points in December 2026. Inflation was running at nearly twice the bank's 2% target.
