French economy moves back into growth territory in February -flash PMI

4:21 am Tuesday, February 21st, 2023

By Sudip Kar-Gupta

PARIS (Reuters) – French economic activity grew in February for the first time since October, helped by a slight easing in inflationary pressures and strength in the jobs market, a survey showed on Tuesday.

S&P Global said its flash reading for the purchasing managers’ index (PMI) for France’s dominant services sector stood at 52.8 points in February, up from 49.4 in January.

Any figure above 50 points shows an expansion in activity. Analysts polled by Reuters had forecast a reading of 49.9 points for the February flash services PMI.

By contrast, the flash February PMI figure for France’s manufacturing sector fell to 47.9 points from 50.5 in January, coming in below forecasts for 50.8 points.

However, the overall flash February composite PMI figure – which includes both the services and manufacturing sectors – rose to 51.6 points from 49.1 in January, above forecasts for a reading of 49.9 points.

The flash figure for the French composite PMI also marked a seven-month high and the first time that this index had been in the expansion territory since October, according to S&P Global.

S&P Global said its survey findings for the euro zone’s second biggest economy showed a moderate expansion in employment and an easing in inflation.

Official data last week showed unemployment in France eased to an almost 15-year low in the last three months of 2022, while French Finance Minister Bruno Le Maire has consistently said he expects inflation to ease from the middle of this year onwards.

“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,” said Joe Hayes, senior economist at S&P Global Market Intelligence.

“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,” added Hayes.

(Reporting by Sudip Kar-Gupta; Editing by Susan Fenton)