Growth returns to French economy

22 Feb 2023

Economic activity in France increased in February for the first time since October, bolstered by a marginal easing in inflationary pressures and a strong jobs market, according to the results of a survey out on Tuesday.
The flash reading for the S&P Global purchasing managers' index (PMI) for the country’s services sector stood at 52.8 this month, a rise from 49.4 in January. A reading over the 50-mark indicates growth.
Analysts surveyed by Reuters had forecast the February flash services PMI to show a reading of 49.9.
In contrast, the flash PMI figure for this month for the manufacturing sector in France declined to 47.9 points from 50.5 in January, below forecasts for 50.8 points, Reuters reports.
That said, the overall flash February composite PMI figure – including the services and manufacturing sectors – increased to 51.6 points from 49.1 in January, surpassing forecasts for a reading of 49.9 points.
Furthermore, the flash figure for the French composite PMI hit a seven-month high, the first time growth was registered in this index since October, said S&P Global.
In addition, the findings showed moderate growth in employment in France and an easing in inflation.
Last week, official data revealed unemployment in France reduced close to a 15-year low in Q4 last year. Yet the country’s Finance Minister, Bruno Le Maire has repeatedly said he predicts inflation will ease from the middle of this year.

“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,” according to 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,” Hayes went on to say.