France: Composite PMI hits highest reading since July 2022 in February
The S&P Global Flash Composite Purchasing Managers’ Index (PMI) rose to 51.6 in February from January’s 49.1. February’s result marked the best performance since July 2022 and ended a three-month run of deteriorating conditions. As such, the index rose above the 50.0 no-change threshold, signaling an improvement in private-sector operating conditions from the previous month.
February’s expansion was solely driven by higher services activity, which recorded its sharpest output growth since September. On the other hand, manufacturing reported a ninth successive decrease in production. More generally, demand prospects were downbeat: Domestic and foreign new orders declined in both sectors. Turning to prices, input cost inflation trended downwards—rising at the softest pace in 14 months—leading to softer output inflation. Finally, business confidence eased slightly in February from the previous month. However, this did not prevent companies from expanding employment for the twenty-sixth month running.
Commenting on the outlook, Joe Hayes, senior economist at S&P Global, said:
“At face value, the February ‘flash’ PMI survey results for France are positive, showing the economy was in growth territory for the first time since October 2022. […] However, it’s difficult to say for certain if we’re at an inflexion point and the French economy is now on its path to recovery. The manufacturing sector downturn intensified in February, and demand conditions within this sector are clearly still fragile.”