After three declines, the French economy regained growth in February thanks to services, according to the provisional PMI for this month published Tuesday by the agency S & P Global, which measures the activity of the private sector. The Flash composite index, which measures this activity, recovered from 49.1 in January to 51.6 in February, which is the highest expansion rate of the French economy since July 2022.

A value above 50 is synonymous with expansion, while a value below this limit indicates contraction. "However, it is difficult to know if the inflection point has been reached and if the French economy is now on the road to recovery," Joe Hayes, economist at S&P Global, said in a statement.

Manufacturing activity down

The economy was driven by services, whose activity jumped from 49.4 to 52.8, a five-month high. But manufacturing output fell to 45.9 from 47.5 in January, falling to a three-month low. This negative evolution of the manufacturing sector is linked to "persistent weakness in demand", especially in foreign markets, notes S&P Global in its statement.

Manufacturers' export sales even "recorded their biggest decline since May 2020 during the month, reflecting an unfavorable economic environment internationally," notes Joe Hayes.

The economist is concerned about the likely future increases in interest rates, which he believes present "a risk for both activity and demand", while noting that "inflation remains stubbornly high in the services sector, with increases in both paid and billed prices having again posted in February at rates close to their historical records".

Despite these obstacles, companies expect business growth over the next 12 months, "basing their optimism on the launch of new projects, forecasts of increased headcount and investment as well as a recovery in demand," according to the statement.

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