French Private Sector Activity Shrinks the Most in 5 Months

The S&P Global France Composite PMI fell to 48.3 in March 2026 from 49.9 in February, worse than market forecasts of 49.3, flash estimates showed. The reading signaled the quickest fall in private sector business activity since last October. The services sector declined further (PMI at a five-month low of 48.3 vs 49.6 in February), while manufacturing output contracted for the first time this year (48.5 vs 51.6). Overall new business volumes shrank at the sharpest rate since July 2025, as underlying weak demand was further exacerbated by the Middle East war, rising geopolitical uncertainty, and client caution ahead of local elections. Exports fell at the steepest pace in 15 months, and employment edged down slightly. Cost pressures rose notably, with input prices increasing at the fastest pace since November 2023, while prices charged rose only marginally. Business confidence weakened sharply, reflecting concerns over the impact of the Iran war on demand and inflation.

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.