It is a bit of a contrast to the periphery country readings, namely Spain and Italy, from earlier. French manufacturing declined back into contraction territory in February but this was largely offset by the stronger services reading, if you can recall here. S&P Global notes that:
"France's manufacturing sector appears to be losing momentum. Moderate declines in December and January provided some hope that the worst was behind us, but the latest results throw this into doubt as output and new orders fell at their sharpest rates since October and November 2022 respectively. Of note was the worsening in export demand, a sharper decrease in purchasing activity and firms' continued efforts to reduce inventories, which bode ill for production in the near-term.
"Nevertheless, the unwinding of inventories is to be expected given how strong these have been built up in recent years. The Suppliers' Delivery Times Index is also back to pre-COVID levels, suggesting that supply chains are now operating on a more stable footing. This reduces the need for companies to have excess stocks to hedge against shortages.
"This is also helping to reduce producer price pressures. The rate of input cost inflation slowed markedly in February to its weakest since September 2020. More stable supply and pricing conditions will be welcomed by manufacturers."
