• Prior 48.2
• Composite PMI 45.1 vs 44.5 prelim
• Prior 47.6

The readings are better than the initial estimates but still a poor showing relative to January. It just reaffirms the negative sentiment weighing on the French economy after the brief uptick from the Olympics last year. HCOB notes that:

“The French services sector is in dire straits. The HCOB PMI for the services sector shows an accelerated contraction in
business activity in February. France’s dismal state stands out even more when compared to other large economies like Italy
and Spain. Lower customer demand, general economic weakness, and hesitant customer behaviour are depressing output,
according to surveyed service companies.

“French service providers are being squeezed by high prices. Rising input costs are burdening companies as demand for
their services suffers significantly. Purchase prices, salaries, and other paid-for services were cited as causes of inflationary
pressures. Output prices are rising only moderately, reflecting companies’ tame efforts to pass higher costs on to customers
– so far with limited success.

“The outlook is bleak. The state of new order intakes is catastrophic, with the PMI implying that domestic orders are
shrinking more than foreign ones. Market participants attribute the weakness in orders to a wait-and-see attitude among
clients and dampened confidence. Despite a slight increase in future output expectations, which remain well below the
historical average, sentiment for the rest of the year is sobering. This is leading to an accelerated reduction in employment.
Some panel members noted that hiring is limited due to budget constraints.”