French Private Sector Activity Contracts at Faster Pace in April - PMI

French private sector activity contracts at a faster rate in April, driven by a sharp decline in services. The Hcob Pmi index for services in France fell to 46.8 from 47.9, the lowest in two months. Manufacturing sector shows signs of recovery, but overall composite PMI declined to 47.3 from 48.0. Companies remain pessimistic about future production and expectations are at a near five-year low.

French private sector activity contracted at a faster pace in April, driven primarily by a significant decline in the services sector. According to the HCOB Flash France PMI survey conducted by S&P Global, the services PMI index fell to 46.8 points, down from 47.9, marking the lowest level in two months [1]. The downturn was attributed to a substantial drop in new business intakes, the steepest decline since November 2020. This result was slightly worse than the forecasted 47.7 points predicted in a poll.

Meanwhile, the manufacturing sector displayed resilience. The output index for manufacturing rose to 50.3 from 48.6, reaching a 35-month high. However, the overall manufacturing PMI showed a slight decline, coming in at 48.2, down from 48.5 in March [1]. The composite PMI, which combines both services and manufacturing indices, declined to 47.3 from 48.0, indicating the eighth consecutive month of contraction [2].

The mixed signals from the French economy have raised concerns among investors. The decline in the service sector points to underlying market weaknesses, while the slight rebound in manufacturing offers a tentative positive note. However, with domestic demand faltering and future business outlooks at a near five-year low, the economic backdrop could impact France-based firms and investors [2].

The French manufacturing sector remains in contraction, with the HCOB France Manufacturing PMI falling to 48.2 in April 2025 from 48.5 in March. Although the downturn was the second mildest in the current contraction streak, the reading still signals that the manufacturing sector remains sluggish [3]. New orders continued to decline, and purchasing activity and inventory levels also dropped. A modest increase in output was observed, but it was not enough to suggest a sustained recovery.

The French economy is navigating a complex scenario, with a sluggish domestic demand set against easing price pressures. However, manufacturing stability and building backlogs indicate potential resilience. As nations balance recovery efforts with upcoming uncertainties, these indicators might shape future policy and economic strategies throughout Europe.

References:
[1] https://www.investing.com/news/economic-indicators/french-private-sector-activity-contracts-sharply-in-april-93CH-3997667
[2] https://finimize.com/content/frances-service-sector-slumps-while-manufacturing-finds-footing
[3] https://www.tradingview.com/news/te_news:456032:0-french-manufacturing-remains-in-contraction/