(Feb 20): The contraction in French business activity eased this month but surprise weakness in the manufacturing sector weighed.
S&P Global’s composite purchasing managers’ index (PMI) rose to 49.9 from 49.1 in January — not quite reaching the 50 mark separating expansion from contraction. Analysts polled by Bloomberg had anticipated an advance to 49.6.
“The French private sector is still struggling to gain real momentum,” Jonas Feldhusen, an economist at Hamburg Commercial Bank, said on Friday in a statement. “The main drag continues to come from the demand side as new orders declined yet again, with the situation looking even worse for export orders.”
France’s economy is nevertheless set to perk up later this year after successfully navigating Donald Trump’s tariffs and a prolonged bout of fiscal uncertainty. Growth this quarter should reach 0.2% to 0.3%, according to a recent Bank of France survey that cited strength in the defence and aerospace sectors.
Unemployment, though, hit a four-year high of 7.9% in the final months of 2025. But inflation, at the lowest pace in half a decade, is boosting real incomes.
See also: UK retail sales grow fastest in 20 months
PMIs are closely watched by markets as they arrive early in the month and are good at revealing trends and turning points in an economy. A measure of breadth of changes in output rather than depth, business surveys can sometimes be difficult to map directly to quarterly GDP.
Composite readings due later in the day from the UK and the US are both expected to remain well above 50.
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