France’s Economy Stabilizes as Services Return to Growth; Manufacturing Weakens in November
France’s private sector showed signs of steadying in November, according to the HCOB Flash PMI survey, as a rebound in services activity offset continuing strain in factories. While manufacturing momentum cooled more than expected, the overall economy moved closer to breakeven thanks to stronger demand in the services sector.
The flash data painted a split picture. The Manufacturing PMI fell to 47.8, missing expectations of 49.0 and down from 48.8 previously, signaling a deeper contraction in factory output and orders. In contrast, the Composite PMI climbed to 49.9, well above the 48.1 forecast and up from 47.7, reflecting a stabilizing private sector. Survey responses highlighted that services returned to expansion for the first time this year, with business activity and new orders improving, even as backlogs and hiring indicators remained subdued—suggesting the rebound is still fragile.
Inflation dynamics added another wrinkle. Input costs accelerated across both manufacturing and services, but firms’ pricing power softened as average output prices were broadly unchanged from October. This combination points to tightening profit margins, even as business confidence in manufacturing improved on the outlook. Overall, November’s PMI data indicate consolidation in the French economy, driven by services resilience amid persistent pressure on industry.
Key Points – Composite PMI rose to 49.9 in November, up from 47.7 and above the 48.1 consensus. – Manufacturing PMI slipped to 47.8, below the 49.0 expected and down from 48.8. – Services activity returned to expansion, underpinning broader economic stabilization. – Demand indicators improved in services, but backlogs and employment stayed soft. – Input cost inflation picked up, while output prices were flat, squeezing margins. – Manufacturing outlook brightened despite weak production and order flows.
