Latest data released by Markit - 19 February 2021
- Prior 47.3
- Manufacturing PMI 55.0 vs 51.5 expected
- Prior 51.6
- Composite PMI 45.2 vs 47.5 expected
- Prior 47.7
Tighter virus restrictions continue to weigh on business activity in general with the services print coming in at a three-month low.
The good news is that manufacturing output is seen picking up a little, improving to a five-month high with the overall print coming in at a three-year high.
That said, the drop in services still carries more weight in the French economy as this sets the course for a double-dip recession to start the new year. Markit notes that:
"The latest PMI data suggested that the French private sector is continuing to struggle amid the ongoing COVID-19 crisis. However, downturns in activity and new orders were confined to the service sector in February, where some businesses remain temporarily closed due to current activity restrictions. Meanwhile, there were signs that manufacturers are taking steps towards a recovery, with new orders increasing at the quickest rate for two-and-a-half years and output expanding solidly.
"Another bright spot in the latest data was the increase in employment for both sub-sectors. The second successive monthly rise at services firms is particularly promising given the ongoing decline in activity and suggests that firms are looking past the current climate and focusing on future growth. This was further illustrated by the strongest expectations regarding future activity since July 2018.
"The pandemic did, however, continue to cause issues on the supply-side, with input shortages driving another sharp rise in cost burdens and delivery delays. Moreover, firms were again unable to pass on higher prices to their clients. Instead, output charges were cut further, and again acted as a squeeze on profit margins."
