FX.co ★ France Factory Contraction Softer Than Initially Expected

France’s S&P Global Manufacturing PMI slipped back into contraction in May 2026, falling to 49.7 from 52.8 in April, though remaining above the flash estimate of 48.9. Output and new orders declined, reversing April’s stockpiling-driven gains, while production, purchasing volumes, and inventories all contracted. Export demand weakened, particularly from Belgium, Germany, and Ukraine. Supply-chain pressures intensified, with vendor delivery times lengthening at the fastest rate since January 2023, reflecting raw material shortages, transport constraints, and higher fuel costs. Purchasing activity cooled after April’s surge, and firms cut inventories at the sharpest pace since November 2025. Employment continued to decline, and backlogs of work fell for the first time this year. Input cost inflation accelerated to a four-year high, driven by fuel, metals, and chemicals, and output prices rose at the fastest rate in 40 months. Business confidence softened amid persistent uncertainty, weak demand, and ongoing geopolitical tensions.