(Reuters) – The French manufacturing sector posted the first increase in its production in almost three years in April and the expected acceleration of military spending could compensate for the impact of uncertainty caused by American customs duties, showed the final survey S&P Global/HCOB published on Friday.
The PMI index advanced at 48.7 in April after 48.5 in March, reaching its highest level since January 2023.
The 50 bar separates growth and contraction of activity. The final figures are greater than a “flash” estimate published above, which was tab for 48.2.
European countries intend to considerably increase their military spending, and S&P Global believes that this could be advantageous for manufacturing companies.
“Orders of local and foreign customers remain down, although they slow down at a lower pace. This suggests potential improvements in the underlying conditions of the manufacturing sector,” said Jonas Feldhusen, economist with Hamburg Commercial Bank AG.
“While customs duties will probably have a negative impact on the French manufacturing sector and exacerbate the uncertainty, the drop in ECB interest rates and EU efforts to reduce the number of bureaucratic obstacles and considerably increase defense expenses could stimulate manufacturing activity,” he added.
(Written by Sudip Kar-Gupta, Pauline Foret, edited by Augustin Turpin)
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