France February final manufacturing PMI 45.8 vs 45.5 prelim

• Prior 45.0

Both output and new orders are still in sharp declines, though at least the situation is seen improving in February. Overall, weak demand conditions remain a major drag on the industry sector in the region. Besides that, price pressures are also seen intensifying slightly so that will be something to be wary about in the months ahead. HCOB notes that:

“The decline is slowing. The state of the French manufacturing industry is so weak that a slower contraction signalled by the
HCOB PMI in February is a small consolation. Flash PMI figures had already suggested that service providers are faring
even worse, with their contraction intensifying. France’s current crisis is arguably due to political reasons. Repeated noconfidence votes and deep ideological divisions in Paris have gripped the economy. The recently concluded “Artificial
Intelligence Action Summit” in Paris vividly demonstrated that France remains an attractive destination for investment
compared to its European neighbours. The country should not squander its solid position through political infighting.

“Price pressures plagued industrial companies in February as input price inflation gained significant momentum. Surveyed
companies cited energy, fuels, precious metals, wood, and plastics as the main causes of cost increases. The growth in
output prices is not keeping pace, indicating weak pricing power among French industrial firms. Some companies have
reportedly lowered their prices due to competitive pressures.

“There are better, but by no means reassuring prospects. Domestic and foreign order intakes continue to shrink significantly,
but downturns slowed. The construction sector was identified as a drag by surveyed French industrial companies.
Nevertheless, there are reports of increased sales to customers in Europe, the USA, Africa, and the Asia-Pacific region.
However, a large-scale recovery is not in sight. Future output expectations have just managed to surpass stagnation,
overcoming half a year of pessimistic sentiment. Nonetheless, it appears that surveyed companies are broadly divided in
their outlook between hope and concern.”

This article was written by Justin Low at www.forexlive.com.