In September 2025, France’s private sector sank into contraction with its most severe slowdown since April, as both manufacturing and services lost steam. The latest flash PMI survey showed the composite output index sliding to 48.4, down from 49.8 in August—well below the 50-mark that signals growth.
Manufacturing bore the brunt. The sector’s PMI dropped to 48.1 (from 50.4), reaching a three-month low, while its output index plunged to 45.9, the weakest in seven months. The services sector also eased, with its PMI falling to 48.9, a two-month trough. This broad weakness has been fueled by persistent declines in new orders—sixteen months and counting—and tepid customer demand across board.
Interestingly, employment in the private sector still managed a slight uptick for a second month in a row, though this has done little to lift morale. Business confidence remains low, strained by political uncertainty and weak forward demand. Competitive pressures combined with shrinking margins pushed firms to reduce their prices—the first cut since May—even though cost pressures are only rising modestly.
The drop in both manufacturing and service sector output in France underlines a growing concern: that the current malaise may spread, especially as firms grapple with weakening orders, subdued demand, and fragile confidence. For investors and policy makers watching closely, the pressing questions are whether this downturn is cyclical or structural, and how much damage it might inflict if the weak trends continue into late 2025.
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