PARIS (Reuters) – The contraction in activity in the private sector in France eased in February and business leaders were optimistic about the economic outlook for the first time since last May, final results of the HCOB/S&P Global Purchasing Managers Survey released Friday.
The final HCOB PMI for the sector stood at 47.1 for last month, the highest reading since January 2023. It stood at 43.1 in January. As a first estimate, the index was given at 46.8 in February.
The threshold of 50 separates a contraction from growth in activity.
“The French manufacturing sector is starting to recover, and at a faster pace,” notes Norman Liebke, economist at Hamburg Commercial Bank. He adds that consumer goods are the main drivers of this recovery.
The new orders sub-index jumped to 46.7 points from 38.9 the previous month, the best performance in 20 months.
“We believe that domestic demand will recover this year, leading to a recovery in the French manufacturing sector,” continues Norman Liebke, noting that recent geopolitical tensions linked to the war in Gaza and attacks on international shipping in the Red Sea had little impact on French industry last month.
“The Red Sea attacks appear relatively harmless in terms of supply chain effects. Although companies have reported longer shipping times, the delays pale in comparison to supply chain disruptions in 2021 “, he said.
(Written by Tassilo Hummel, Claude Chendjou, edited by Kate Entringer)
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