• Prior 49.4
  • Manufacturing PMI 47.9 vs 50.8 expected
  • Prior 50.5
  • Composite PMI 51.6 vs 49.9 expected
  • Prior 49.1

It's a contrasting report as manufacturing activity declined back into contraction territory but the headline reading will definitely be the one that excites the market. As a whole, the French economy returns back to growth in February and reaffirms much resilience - especially in the services sector. S&P Global notes that:

“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. More encouragement could be taken from the underlying sector data, which showed the expansion was driven by services, a sector which has been under pressure due to the negative demand impact of eroding real incomes.

“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. Factory export orders fell at the sharpest rate since May 2020, providing a downbeat assessment of broader global economic conditions.

“The likelihood of further increases in interest rates also remains, and this poses a risk to demand and activity. Inflation remained stubborn in the service sector, with rates of input cost and output price inflation holding close to their peaks. How much needs to be done by monetary policymakers to push this lower is uncertain, although sustained resilience in the labour market suggests more needs to be done to take heat out of the French economy.”