French Private Sector Returns to Contraction

The HCOB France Composite PMI for January 2026 was at 49.9 in February 2026, matching the preliminary estimate, up from 49.1 in the prior month. The data suggested that French private sector activity remained largely stagnant in February, with persistent uncertainty affecting demand. The services PMI edged up to 49.6 but remained below 50, signaling ongoing contraction compared to January’s 48.4. Conversely, manufacturing output rose for a second successive month in February. New business fell for the third month, with services most affected. Employment rose slightly, driven by services, while factory staffing fell. Backlogs declined for a sixth month. Turning to prices, output charges climbed to their highest since October 2024, even as input cost pressures eased. Year-ahead output expectations remained strong, staying close to January’s 16-month high.

The HCOB France Composite PMI rose to 49.9 in February 2026 from 49.1 in January and slightly above market forecasts of 49.7, flash estimates showed. The reading indicates that French business activity was largely flat during the month, amid ongoing weak demand conditions. Services activity remained in contraction territory (PMI at 49.6 vs 48.4 in January), in contrast to continued expansion in manufacturing output (51.6 vs 52.1), despite growth slowing from January’s near four-year high. New business inflows fell for the third month running at the fastest pace since July, with exports remaining a key drag on total order books in February, registering their steepest decline since December 2024. At the same time, hiring activity stalled after two months of growth spanning the New Year. As for prices, input cost inflation slowed to a four-month low, while output charges were trimmed marginally. Firms’ confidence for the year ahead weakened slightly but remained above the 2025 average.

The HCOB France Composite PMI for January 2026 was revised higher to 49.1 from a flash estimate of 48.6, but remained below December’s 50.0. The latest reading pointed to renewed weakness in private sector activity, with the downturn driven mainly by the services sector, where the Business Activity Index slipped from 50.1 in December to 48.4 in January, marking the first contraction since October. Manufacturing showed only tentative signs of stabilization, with capacity pressures rising but overall demand still subdued. New orders across the private sector fell at the fastest pace in six months, while employment recorded only marginal growth. Exports continued to weigh on activity, as overseas demand for services remained in contraction. Meanwhile, input cost inflation edged up to a five-month high, prompting firms to raise output charges modestly. Finally, business confidence improved, with year-ahead growth expectations rising to their strongest level since September 2024.