The French economy grew again in February thanks to services, after three months down, according to the provisional PMI index for this month published on Tuesday by the S&P Global agency, which measures private sector activity.
The Flash Composite Index, which measures this activity, recovered from 49.1 in January to 51.6 in February, the fastest rate of expansion for the French economy since July 2022.
A value above 50 indicates expansion, while a value below this limit indicates contraction.
“However, it is difficult to know if the tipping point has been reached and if the French economy is now on the road to recovery,” Joe Hayes, an economist at S&P Global, was quoted as saying in a press release.
The economy is driven by services, whose activity jumped from 49.4 to 52.8. But manufacturing output fell to 45.9 from 47.5 in January, falling to its lowest level in three months.
Sharp drop in export sales
This negative development in the manufacturing sector is linked to “persistently weak demand,” particularly in foreign markets, S&P Global notes in its press release.
Manufacturers’ export sales even “recorded their biggest decline since May 2020 for the month, reflecting unfavorable economic conditions internationally,” notes Joe Hayes.
The economist is concerned about the probable future rises in interest rates that, according to him, pose “a risk for both activity and demand”, while pointing out that “inflation remains stubbornly high in the services sector, increases in prices paid and prices invoiced, having once again registered rates close to their historical records in February”.
Despite these obstacles, the companies forecast business growth for the next 12 months, “basing their optimism on the launch of new projects, forecasts for increased workforce and investment, as well as a recovery in demand,” according to the note. press.
S&P Global surveyed a representative panel of 750 French companies in the manufacturing and service sectors between February 10 and 17.
Source: BFM TV
